LAW REPORTS Sixth Series Reports of Selected Cases from the Courts of Alberta and Appeals

VOLUME 35 (Cited 35 Alta. L.R. (6th))

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[Indexed as: Stewart Estate v. 1088294 Alberta Ltd.] Lynda Calder in her capacity as Executrix of the Estate of Merville V. Stewart (Deceased), Lynda Calder, Morgan Stewart, Cody Stewart, Cody Stewart in her capacity as Administrator or Litigation Representative for the Estate of James D. Stewart (Deceased) and as Litigation Representative for Morgan Stewart, Jerome Development Limited, Bowen Family Properties Ltd., Ronald B. Pole, Kevin R. Pole, Danny G. Oneil in his capacity as Executor of the Estate of Mabel B. Oneil (Deceased), Robert Copley, Karen Nell Copley, Margaret Alice Demers, Mary Jean Biggar, Goldie Alberta Danielsen, Edna Keam, Wilma Marshall and Laurel Lee McLaren, Appellants Not Parties to the Cross-Appeal of Coastal Resources Ltd. Not Parties to the Cross-Appeal of Nexen Inc. and ExxonMobil Canada Ltd. (Plaintiffs) and 1088294 Alberta Ltd., Appellant Cross-Respondent to the Cross-Appeal of Coastal Resources Ltd. Cross-Respondent to the Cross-Appeal of Nexen Inc. and ExxonMobil Canada Ltd. (Plaintiff/ Defendant by Counterclaim) and J. Timothy Bowes, Appellant Not a Party to the Cross- Appeal of Coastal Resources Ltd. Cross-Respondent to the Cross-Appeal of Nexen Inc. and ExxonMobil Canada Ltd. (Defendant by Counterclaim) and TAQA North Ltd., Esprit Exploration Ltd., Bonavista Energy Corporation, and Triquest Energy Corp., Respondents Not Parties to the Cross-Appeal of Coastal Resources Ltd. Not Parties to the Cross-Appeal of Nexen Inc. and ExxonMobil Canada Ltd. (Defendants) and Coastal Resources Limited, Respondent/Cross-Appellant Not a Party to the Cross-Appeal of Nexen Inc. and ExxonMobil Canada Ltd. (Defendant/Plaintiff by Counterclaim) and Nexen Inc. and ExxonMobil Canada Ltd., Respondents/Cross- 2 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Appellants Not a Party to the Cross-Appeal of Coastal Resources Ltd. (Defendants/Plaintiffs by Counterclaim) Alberta Court of Appeal Docket: Appeal 1301-0360-AC 2016 ABCA 144 Patricia Rowbotham, J.D. Bruce McDonald, Brian O’Ferrall JJ.A. Judgment: May 6, 2016 Civil practice and procedure –––– Costs — Jurisdiction and discretion as to costs –––– Plaintiff lessors and parties to whom lessors top-leased hydrocarbon rights were successful in appeal and in having defendants’ cross-appeal dis- missed — Plaintiffs and B, defendant by counterclaim, claimed costs and dis- bursements in amount of $2,261,358.08 including trial and appeal costs — De- fendant lessees submitted that each party should be responsible for its own appeal costs and that court should exercise discretion and award no costs on appeal because lawsuit was leading case in oil and gas law — On submissions for costs, issues arose as to whether court should determine trial costs or remit them back to trial judge for determination, and factors governing costs award of litigation — It would be less costly and more expeditious for all parties if pre- sent court determined trial costs — If matter of costs were remitted to trial judge, her decision might be appealed with leave and present court could be called upon to assess trial costs in any event — Plaintiffs were successful on appeal and factors that would militate against costs did not arise on appeal or at trial — Little weight was given to parties’ post-trial costs justifications as they were contradictory, in that plaintiffs argued in costs submissions to trial judge that defendants were only entitled to modest costs, and that after defendants’ success at trial they sought significant costs but now only contended that modest or no costs award was appropriate — On consideration of factors in Rule 10.33 of Alberta Rules of Court, especially complexity of trial and of appeal, two time multiplier was awarded — Factors cited by plaintiffs as justifying lump sums were same factors considered and applied to award two times multiplier. Civil practice and procedure –––– Costs — Costs where counterclaim set up — Principles in awarding costs –––– Plaintiff lessors and parties to whom lessors top-leased hydrocarbon rights were successful in appeal and in having defendants’ cross-appeal dismissed — Plaintiffs and B, defendant by counter- claim, claimed costs and disbursements in amount of $2,261,358.08 including trial and appeal costs — Defendant lessees submitted that each party should be responsible for its own appeal costs and that court should exercise discretion and award no costs on appeal because lawsuit was leading case in oil and gas law — On submissions for costs, B claimed separate set of trial costs doubled from date Stewart Estate v. 1088294 Alberta Ltd. 3

of formal offer, December 29, 2011 — B did not seek multiplier or appeal costs — B was instrumental in lessors’ signing top leases but was not party to proceedings until he was made party by counterclaim of defendants N Inc. and E Ltd. — Counterclaim sought damages of minimum $600,000 from B and from numbered company — N Inc. and E Ltd. should be solely responsible for these costs, and $181,650 claimed by B to defend counterclaim was excessive — Is- sue raised by counterclaim, champerty, required preparation which was not en- tirely subsumed in preparation of main case — B’s personal exposure was $600,000 — B was entitled to costs in lump sum amount of $50,000 for trial preparation and for trial for which N Inc. and E Ltd. were jointly and severally liable — Trial costs were doubled on basis of time of formal offer made before trial, on December 29, 2011 — There was no reason to deny plaintiffs, including B, costs consequences of besting their offer. Civil practice and procedure –––– Costs — Effect of success of proceed- ings — Miscellaneous –––– Plaintiff lessors and parties to whom lessors top- leased hydrocarbon rights were successful in appeal and in having defendants’ cross-appeal dismissed — Plaintiffs and B, defendant by counterclaim, claimed costs and disbursements in amount of $2,261,358.08 including trial and appeal costs — Liability of defendant EE Ltd. was found to differ from that of other defendants, and entire court held that EE Ltd. was not jointly and severally lia- ble with working interest owners — On submission for costs, EE Ltd. argued that this meant that plaintiffs were wholly unsuccessful in their claim against EE Ltd. and therefore no appeal costs should be awarded against it — Although EE Ltd. was not found liable for value of all natural gas wrongfully produced from relevant well, it was found liable for overriding royalties it received — EE Ltd. resisted claim for disgorgement of overriding royalties — Plaintiffs were not wholly unsuccessful in claim against EE Ltd. — EE Ltd.’s situation was differ- ent from those of other defendants in that it was merely recipient of portion of value of natural gas wrongfully produced by working-interest owners — Its lia- bility lay in law of personal property and not in tort — Liability of EE Ltd. for costs was determined to be $45,000 for trial costs and $5,000 for appeal costs — Assessment reflected reduction in cost that may otherwise have been ordered for fact that EE Ltd. was successful in arguing that it was not jointly and severally liable for wrongful production by working-interest owners — As consequence, EE Ltd.’s liability for costs was to be deducted from total amount of costs awarded — Trial costs were doubled from time of formal offer made by plain- tiffs prior to commencement of trial — Plaintiffs made two informal offers before appeal was heard, and those offers were bested — Doubling of costs of appeal hearing was allowed — EE Ltd. was solely liable for recoverable Sched- ule C fees in amount of $100,000. Civil practice and procedure –––– Costs — Offers to settle or payment into court — Offers to settle — Failure to accept offer — Multiple plaintiffs or 4 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

defendants –––– Plaintiff lessors and parties to whom lessors top-leased hydro- carbon rights were successful in appeal and in having defendants’ cross-appeal dismissed — Prior to January 11, 2012 commencement date of trial, plaintiffs made informal offer of $10.5 million followed with formal offer of $18 million in December 29, 2011 — Informal offers which followed were not specific but reference was made to “defendants” so one could reasonably infer that this en- compassed all defendants — Plaintiffs’ formal offer of December 29, 2011 spec- ified that it was made to defendants and plaintiffs by counterclaim which at time were T Ltd., N Inc., E Ltd., EE Ltd., B Corp., T Corp. and C Ltd. — Before hearing of appeal, plaintiffs made two informal offers of $2.957 million in July 2014 and $5.525 million in August 2014 — Pre-appeal offers were bested — In costs submissions, B Corp. and C Ltd. argued that despite offers of settlement they were compelled to continue producing because they owed duty to lessors who had not told them to vacate and who were not parties to litigation — B Corp. and C. Ltd. further argued that fact that they were compelled to defend leases in absence of notice to vacate by putative lessors ought to be factor in reducing or eliminating costs award against them — B Corp. and C Ltd. misun- derstood effect of pooling which was required in order to constitute legal pro- duction spacing unit — None of lessees had right to produce as soon as any one of lessors withdrew consent to continued production — If one lease in pooled production spacing unit is terminated, remaining leases do not necessarily termi- nate, but production must cease — If B Corp. had ceased production, its lessors could have no complaint — Leaving lessors’ molecules in ground is not actiona- ble — Producing molecules which one has no right to produce triggers obliga- tion to account to owner for that production — There was no reason to deny plaintiffs, including B, who was defendant to original action by counterclaim, costs consequences of besting offer and trial costs from time of formal offer of December 29, 2011 were doubled — Informal offers made before appeals were heard were conditional but there was every indication that acceptance by de- fendants would have led to approval by all plaintiffs — Such offers were sincere attempts to settle dispute without need for lengthy appeal hearing and doubling of costs of appeal hearing was allowed. Civil practice and procedure –––– Costs — Persons entitled to or liable for costs — Multiple parties — Miscellaneous –––– Plaintiff lessors and parties to whom lessors top-leased hydrocarbon rights were successful in appeal and in having defendants’ cross-appeal dismissed — Plaintiffs and B, defendant by counterclaim, claimed costs and disbursements in amount of $2,261,358.08 in- cluding trial and appeal costs — Defendant lessees submitted that each party should be responsible for its own appeal costs and that court should exercise discretion and award no costs on appeal because lawsuit was leading case in oil and gas law — Liability of defendant EE Ltd. was found to differ from that of other defendants, and entire court held that EE Ltd. was not jointly and severally liable with working interest owners — EE Ltd.’s situation was different from Stewart Estate v. 1088294 Alberta Ltd. 5 those of other defendants in that it was merely recipient of portion of value of natural gas wrongfully produced by working-interest owners — Liability of EE Ltd. for costs was determined to be $45,000 for trial costs and $5,000 for appeal costs — EE Ltd.’s liability for costs was to be deducted from total amount of costs awarded — Defendants, other than EE Ltd., were jointly and severally lia- ble for damages — There was no principled basis on which to make liability for costs any different — It was open to defendants to determine among themselves portion of costs for which each was responsible, but this ought not to be plain- tiffs’ responsibility — After deducting EE Ltd. amounts, remaining defendants were jointly and severally liable for balance — Plaintiffs were entitled to recov- erable Schedule C fees in amount of $783,000 from defendant-lessees and EE Ltd. — B was entitled to recoverable Schedule C fees costs in amount of $100,000 from defendants N Inc. and E Ltd. — Liability for recoverable Sched- ule C fees was in amount of $100,000 against EE Ltd. solely, $683,000 against B Corp. jointly and severally with other defendants, $683,000 against C Ltd. jointly and severally with other defendants, $683,000 against N Inc. and E Ltd. jointly and severally with other defendants, and $100,000 against N Inc. and E Ltd. jointly and severally against each other — Assessment officer was to assess disbursements sought to be recovered by plaintiffs in accordance with rules gov- erning assessment of such costs. Cases considered: Delta Hotels Ltd. v. Okabe Canada Investments Co. (1992), 3 Alta. L.R. (3d) 85, 131 A.R. 118, 25 W.A.C. 118, 1992 CarswellAlta 75, 1992 ABCA 176 (Alta. C.A.) — referred to Freyberg v. Fletcher Challenge Oil & Gas Inc. (2006), 2006 ABCA 260, 2006 CarswellAlta 1238, 397 A.R. 235, 384 W.A.C. 235 (Alta. C.A.) — considered Globex Foreign Exchange Corp. v. Kelcher (2011), 2011 ABCA 240, 2011 CarswellAlta 1356, 2011 C.L.L.C. 210-043, 93 C.C.E.L. (3d) 239, 337 D.L.R. (4th) 207, 48 Alta. L.R. (5th) 215, [2012] 1 W.W.R. 17, [2011] A.J. No. 881, 513 A.R. 101, 530 W.A.C. 101 (Alta. C.A.) — referred to Hill v. Hill (2013), 2013 ABCA 313, 2013 CarswellAlta 1785, [2013] A.J. No. 1016, (sub nom. Hill v. Hill Family Trust) 561 A.R. 50, (sub nom. Hill v. Hill Family Trust) 594 W.A.C. 50, 3 Alta. L.R. (6th) 302 (Alta. C.A.) — considered Hogarth v. Rocky Mountain Slate Inc. (2013), 2013 ABCA 116, 2013 Carswell- Alta 835, [2013] 12 W.W.R. 732, 87 Alta. L.R. (5th) 108 (Alta. C.A.) — considered Mahe v. Boulianne (2010), 2010 ABCA 74, 2010 CarswellAlta 396, [2010] A.J. No. 238, 21 Alta. L.R. (5th) 277, 84 C.P.C. (6th) 263, 81 R.F.L. (6th) 4 (Alta. C.A.) — considered 6 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Nexxtep Resources Ltd. v. Talisman Energy Inc. (2012), 2012 ABQB 708, 2012 CarswellAlta 2089, [2013] 5 W.W.R. 832, 77 Alta. L.R. (5th) 16 (Alta. Q.B.) — considered RVB Managements Ltd. v. Rocky Mountain House (Town) (2015), 2015 ABCA 304, 2015 CarswellAlta 1771 (Alta. C.A.) — considered Rules considered: Alberta Rules of Court, Alta. Reg. 124/2010 R. 4.24 — referred to R. 10.31 — considered R. 10.31(1)(b)(i) — considered R. 10.33 — considered Tariffs considered: Alberta Rules of Court, Alta. Reg. 124/2010 Sched. C, Tariff of Costs, column 4 — referred to Sched. C, Tariff of Costs, column 5 — referred to

ADDITIONAL REASONS to judgment reported at Stewart Estate v. 1088294 Alberta Ltd. (2015), 2015 ABCA 357, 2015 CarswellAlta 2110, 25 Alta. L.R. (6th) 1, [2015] A.J. No. 1227, [2016] 4 W.W.R. 20, 607 A.R. 201, 653 W.A.C. 201, 50 B.L.R. (5th) 171 (Alta. C.A.), regarding costs.

P.T. Linder, Q.C., S.B.G. Matthews, for Appellants and Appellants / Cross- Respondents A.D. Grosse, for Respondent, Esprit Exploration Ltd. (now Pengrowth Energy Corporation) R.C. Steele, for Respondent, Bonavista Energy Corporation C.A. Crang, for Respondent / Cross-Appellant, Coastal Resources Limited R.F. Steele, P.G. Chiswell, for Respondents / Cross-Appellants, Nexen Inc. and ExxonMobil Canada Ltd.

Per curiam: I. Overview 1 In our reasons for judgment reported as Stewart Estate v. 1088294 Alberta Ltd., 2015 ABCA 357 (Alta. C.A.) we invited the parties to make written submissions on costs if they were unable to agree. We have con- sidered those submissions and our conclusions follow. 2 By way of introduction, the appellants (lessors and parties to whom the lessors “top-leased” their hydrocarbon rights) were successful in their appeal and in having the respondents’ cross-appeal dismissed. The appel- lants and the cross-respondent, J. Timothy Bowes, claim costs and dis- Stewart Estate v. 1088294 Alberta Ltd. Per curiam 7

bursements of $2,261,358.08, which includes trial and appeal costs. In brief, the appellants support their claim as follows: their unqualified suc- cess on appeal and cross-appeal; they were compelled to sue because of the respondents’ tortious conduct and the litigation is ten years and counting; the suit was complex and they were pursuing five respondents each with a different approach to defending the claims against them at trial and on the appeal; the respondents’ proposed bill of costs for the trial alone was 50% more than the appellants’ claim for trial and appeal; the appellants bested a formal offer of $18 million made before trial; and there were three informal offers, two before the appeal, all of which were bested. The appellants request that we determine trial costs. 3 The respondent-lessees contend that each party should be responsible for its own appeal costs given what they characterized as novel issues, and trial costs should be remitted back to the trial judge for determina- tion. More specifically, the respondents contend that this court should exercise its discretion and award no costs on appeal because the lawsuit is a “leading case in oil and gas law” as it addressed important industry- wide issues for the benefit of oil industry participants and freeholder in- terest holders. In the alternative, a much reduced award is appropriate. They contend that the following consideration militates against the re- spondents paying the appellants’ costs: the lessors would be over-indem- nified because they were never responsible for costs as a result of an agreement with a non-party (the top lessee) and a retainer agreement with their counsel. The respondents contend that trial costs are on reserve by the trial judge and should be decided by her (not by this court). They say the appellants pursued unmeritorious collateral issues at trial and used objectionable expert witness tactics. Coastal Resources Limited and Bonavista Energy Corporation submit that they are both in a unique posi- tion because of the time when they were added as parties and the fact that their legal relationship was arguably with a non-party (Snell Farms Ltd. and Wheatland Farming Company Ltd.). Esprit Exploration Ltd. also dis- tinguishes itself from the other respondents because its liability (dis- gorgement of gross royalties) is arguably of a different nature. 4 A Consent Order of this court on April 9, 2014 directed that TAQA North Ltd. would have no monetary liability to the appellants, including liability for costs incurred prior to April 9, 2014 or from the appeal. 8 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

II. Analysis 5 This section addresses whether this court should determine trial costs or remit them back to the trial judge for determination; what factors gov- ern the award of costs in this litigation; whether Bowes is entitled to costs and, if so, in what amount; whether Esprit’s special circumstances warrant different costs; the effect of the informal and formal offer made before trial and the informal offers made thereafter; and whether the re- spondents (other than Esprit) should be held jointly and severally liable or liable pro rata commensurate with damages.

A. Should this Court determine trial costs or remit them back to the trial judge for determination? 6 Written submissions about trial costs were made to the trial judge and her costs decision is reserved. 7 The appellants submit that because the issues before the trial judge were the same as those before this court, we are in a position to award trial costs and doing so would be timely and cost-effective. 8 Bonavista Energy Corporation contends that the trial costs should be determined by the trial judge since there are unique aspects of the trial that the trial judge is best positioned to quantify. Nexen Inc. and Exx- onMobil Canada Ltd. take the same position and say the trial judge is uniquely positioned to decide trial costs, she is seized and her decision is reserved. They make specific claims about the appellants’ trial conduct which they contend warrant special consideration. Coastal also submits the trial judge should decide trial costs but in the event this court deter- mines costs, it argues that “grossly excessive costs” are being claimed. 9 This court has determined trial costs in the past when the appellant was successful on appeal. The appellants cited Hogarth v. Rocky Mountain Slate Inc., 2013 ABCA 116 (Alta. C.A.) at paras 5-6, 87 Alta LR (5th) 108 as an example, although the issue of the appropriateness of this court setting trial costs when the trial judge had already embarked on a process for setting the same was not discussed in that case. The respon- dents’ authorities cited for the proposition that we ought to remit the is- sue of trial costs to the trial judge are also distinguishable because in both cases cited the appeal was dismissed: Delta Hotels Ltd. v. Okabe Canada Investments Co., 1992 ABCA 176, 3 Alta. L.R. (3d) 85 (Alta. C.A.) and Globex Foreign Exchange Corp. v. Kelcher, 2011 ABCA 240, 48 Alta. L.R. (5th) 215 (Alta. C.A.). Stewart Estate v. 1088294 Alberta Ltd. Per curiam 9

10 We conclude that it will be less costly and more expeditious for all parties if this court determines trial costs. If we were to remit the matter of costs to the trial judge, her decision might be appealed (with leave) and this court could be called upon to assess trial costs in any event.

B. What factors govern the award of costs in this litigation? 11 As noted above, the respondents’ position is that each party should bear its own costs. We reject that position: the appellants were successful on appeal and the factors that would militate against costs do not arise on this appeal nor, in our view, did they arise at trial. 12 That leaves the question of whether we should exercise our discretion to award enhanced costs, i.e., costs above the tariffs prescribed by Col- umn 5.

1. Costs Submissions Made After Trial 13 The appellants justify their position in part because they seek “costs on the same multiplier, and for the same items, and with the same lump sum components” as the respondents sought after trial. However, reli- ance on the trial submissions is a double-edged sword: the appellants strenuously argued in their submissions to the trial judge that the respon- dents were only entitled to very modest costs. They emphasized in those submissions that the proceedings “were efficient and in the best tradition of the adversarial process” and noted the “extensive cooperation between counsel that enabled ... efficiency” at trial and in pre-trial proceedings. They said “it was a testament to the cooperation and efforts of counsel on both sides” that the trial was expeditious and “this efficiency ... should be reflected in a lower costs assessment” against them. 14 The respondents’ arguments about costs are similarly contradictory: after their success at trial they sought significant costs but now they con- tend only a modest award or no costs are appropriate. The respondents attempt to distinguish their previous position on the basis that no such award was granted and there were other factors that led to those submissions. 15 Given these contradictions, we give little weight to the parties’ post- trial justifications for costs. 10 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

2. Multiplier of Column 5 Tariffs 16 Costs are governed by Schedule C: Tariff of Recoverable Fees, Al- berta Rules of Court, Alta Reg 124/2010. The quantum of damages claimed exceeds $1.5 million therefore Column 5 applies. 17 Rule 10.33 of the Rules provides a list of factors a court may consider when determining costs. They include the degree of success, the amount claimed and recovered, the importance of the issues, the complexity of the action, and conduct that shortened proceedings. Costs may be denied when conduct unnecessarily lengthened proceedings or there was mis- conduct. After considering the foregoing factors, reasonable and proper costs may be awarded in “any amount that the court considers to be ap- propriate in the circumstances” including full indemnity or lump sums: Rule 10.31. 18 On the issue of trial costs, the appellants submit that the action’s com- plexity (volume of documents, days of questioning, agreed exhibits, number of lay and expert witnesses and volume of written arguments) support a four times multiplier of the tariff amounts in Column 5. The respondents argue that no multiplier should be used. 19 Factors cited by the appellants to support the four times multiplier to the tariffed items for the appeal are that they were responding to five counsels’ submissions on behalf of five respondents, the issues were complex and varied, the appeal hearing was two days in length and they achieved success on virtually all the grounds of appeal. 20 Bonavista favours no costs or a reduced award because of the novel nature of the issues. It submits the court should not encourage parties “such as these Plaintiffs” (presumably referring to the top lessees) to “in- terfere with long standing commercial relationships”. In any event, they say at most tariffed Column 5 costs are appropriate because “all” multi- ples cases “involve egregious conduct on the part of the unsuccessful party, which conduct is absent”. That is an overstatement as the cases set out in Appendix 1 demonstrate. 21 Bonavista objects to the “sweeping” nature of the appellants’ submis- sions. It notes that some of the appellants’ justification for enhanced costs is based on allegations that do not apply to Bonavista since it ac- quired its assets in January 2004 and Bonavista knew nothing about the well’s history. By then the 7-25 well had resumed production and Bonavista believed it had contractual royalty obligations to Snell/Wheatland, and paid more than $1.5 million in royalties from 2001 to 2011 on the basis of this belief. Among other things, this respondent Stewart Estate v. 1088294 Alberta Ltd. Per curiam 11

also notes that it did not receive a Notice to Vacate and was first served in 2006. Similar submissions are made by Coastal. 22 The record does not support Bonavista’s submissions. In January 2004 Bonavista acquired all of the shares of Triquest Energy Corp. It was Triquest which had served the independent operations notice on Nexen, the operator of the 7-25 well. This initiated the wrongful produc- tion at issue in this case. When Bonavista acquired Triquest, it would be deemed to have acquired Triquest’s knowledge. Prior to its acquisition of Triquest in 2004, Triquest’s files would have revealed that the 7-25 well had not been produced in years and that it was Triquest which took ac- tion to get the well back on production. There is no merit to Bonavista’s submission that it knew nothing about the well’s history. The company it acquired knew the history only too well. Likewise, the record does not support Coastal’s submissions. Coastal’s predecessor-in-title, Unocal, was served with the Notice to Vacate in the Fall of 2005 because Coastal had failed to register its interest on title and Coastal was advised of the litigation in December of 2005. 23 Nexen and ExxonMobil raise the issue of the lessors’ indemnification by the top lessee and argue that since the lessors incurred no liability for costs, any award would be a windfall and contrary to the purpose of a costs award, namely partial indemnification of costs actually incurred. Although their primary submission is that any award over-indemnifies the appellants, if this court is not persuaded of that, Nexen and Exx- onMobil argue that the most that should be awarded is a lump sum of $70,000, about two times Column 5, the same scale this court awarded in Freyberg v. Fletcher Challenge Oil & Gas Inc., 2006 ABCA 260 (Alta. C.A.), 3 Alta. L.R. (6th) 302. We question Nexen and ExxonMobil’s suggestion that $70,000 in costs would be roughly two times Column 5. We would have estimated two times Column 5 as being more like $200,000. 24 Application of a multiplier is not unprecedented when the trial is long and complex and the quantum of damages claimed is significantly greater than $1.5 million: Nexxtep Resources Ltd. v. Talisman Energy Inc., 2012 ABQB 708 (Alta. Q.B.) at para 24, (2012), 77 Alta. L.R. (5th) 16 (Alta. Q.B.) (three times Column 5 and no misconduct); Hill v. Hill, 2013 ABCA 313 (Alta. C.A.) at paras 39-40, (2013), 561 A.R. 50 (Alta. C.A.) (four and five times Column 5 for incessant misconduct). 25 An appendix of cases that have discussed multipliers is attached. To summarize, Alberta courts have typically awarded a multiplier of the tar- 12 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

iffs in Column 5 in three circumstances: when the complexity of the ac- tion warrants it, when the amount in dispute significantly exceeds the $1.5 million threshold for Column 5 or when the conduct of one of the parties warranted a multiplier. However, generally, courts also rely upon the other considerations set out in Rule 10.33 in determining whether a multiplier should be applied. There is nothing in the cases surveyed to suggest that the analysis for applying a multiplier differs in an oil and gas context. 26 Since a costs award is ultimately at the discretion of the judge, there is little in the way of a uniform basis upon which a multiplier is awarded or declined. It is highly dependent on the unique facts and circumstances of each case. However, a general principle arising from the case law is that the discretion to grant costs must be exercised judicially, and in line with the factors in Rule 10.33. Additionally, in actions where the amount in dispute greatly exceeds Column 5, there is a general recognition that Schedule C is deficient, and that a multiplier may be applied. However, courts are careful to avoid awarding a multiplier that would result in the over-indemnification of a successful party. 27 The leading oil and gas case from this court is Freyberg. The appel- lant sought a declaration that a freehold petroleum and natural gas lease had terminated, as well as an accounting of the proceeds of production from that well. This court awarded a two times multiplier for the trial and the appeal. A two times multiplier when damages were in the range of $25M was also awarded in RVB Managements Ltd. v. Rocky Mountain House (Town), 2015 ABCA 304, 259 A.C.W.S. (3d) 247 (Alta. C.A.). This was an action to recover damages resulting from the diversion of water, which created remediation costs and delays in developing land. 28 Having considered the factors in Rule 10.33, especially the trial’s complexity (volume of documents, days of questioning, agreed exhibits, number of lay and expert witnesses and volume of written arguments) and the complexity of the appeal (five respondents, the issues were com- plex and varied and the appeal hearing was two days in length), we award a two times multiplier.

3. Lump Sums 29 Rule 10.31(1)(b)(i) provides that “a lump sum instead of or in addi- tion to assessed costs” may be ordered. The appellants contend that lumps sums are appropriate for both the trial and the appeal because of the complexity, duration, number of submissions to which they were re- Stewart Estate v. 1088294 Alberta Ltd. Per curiam 13

quired to respond and the quantum in issue. They claim lump sums of $100,000 for the trial and $50,000 for the appeal. 30 In our view, the factors cited by the appellants as justifying lump sums are the same factors that we considered and applied to award the two times multiplier. Accordingly, it would be duplicative to consider those factors and we decline to award any lump sums.

C. Counterclaim Costs Claimed by Bowes (Trial Only) 31 Bowes claims a separate set of trial costs on Column 4 (the counter- claim sought damages of a minimum $600,000 from Bowes and the numbered company, 1088924 Alberta Ltd.) doubled from date of the for- mal offer, December 29, 2011. He does not seek a multiplier or appeal costs. 32 Bowes was instrumental in the lessors’ signing the top leases but was not a party to the proceedings until he was made a party by the counter- claim of Nexen and ExxonMobil. The counterclaim focused on a cham- perty and maintenance claim, which was rejected by the trial judge and by this court. 33 Bowes submits that his costs submission mirrors those proposed by the respondents after trial but as mentioned earlier, this argument carries little weight. 34 Nexen/ExxonMobil argue that a separate set of costs for Bowes is not justified. He was represented by the same lawyers who represented the other appellants at trial, few trial submissions addressed the claims against Bowes and there were no witnesses, evidence or documents spe- cifically dedicated to the counterclaim. In short, only costs which are truly incremental should be recoverable and there were “virtually none” with respect to that counterclaim. 35 Coastal submits that if any costs are awarded, they should be 100% payable by Nexen/ExxonMobil, who instituted the proceedings against Bowes. 36 We agree that Nexen/ExxonMobil should be solely responsible for these costs, and we agree with Nexen/ExxonMobil’s submissions that the $181,650 in costs claimed by Bowes to defend their counterclaim was excessive. However, the issue raised by the counterclaim, champerty, re- quired preparation which was not entirely subsumed in the preparation of the main case. Bowes’ personal exposure was $600,000. 14 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

37 In our view, Bowes is entitled to costs and we award a lump sum of $50,000 for trial preparation and trial for which Nexen and ExxonMobil are jointly and severally responsible. The effect of offers made on his behalf is discussed later in these reasons.

D. Esprit 38 This court concluded that Esprit’s liability to the appellants differed from that of the other respondents. The entire court held that Esprit was not jointly and severally liable with the working interest owners. Esprit’s submission is that the foregoing means the appellants were “wholly un- successful” in their claim against Esprit and therefore no appeal costs should be awarded against it. 39 We reject Esprit’s submissions in this regard. In the final analysis, although Esprit was not held liable for the value of all of the natural gas wrongful produced from the 7-25 well, it was found liable for the over- riding royalties it received. Esprit resisted the claim for disgorgement of the overriding royalties. The appellants were not wholly unsuccessful in their claim against Esprit. 40 As regards trial costs, Esprit submits that there should be an appor- tionment between Esprit and the appellants. It is prepared to pay costs specifically relating to it and for its pro rata share of common costs. However, its position is that it “should never have been dragged through a lengthy trial ... facing joint and several liability”. In any event, its maxi- mum liability is tariffed Column 4 costs because at most, its damages are below the Column 5 minimum of $1.5 million (i.e., $1,357,703.68). Es- prit submits that because it is not jointly and severally liable for damages with the other respondents, it would not be appropriate for it to have to negotiate terms with the others without guidance from this court. 41 The appellants’ bills of costs for trial and appeal do not differentiate among the respondents. They contend that the damages payable by Esprit exceed Column 5’s minimum when prejudgment interest of over $200,000 is added to damages of $1,357,703.68. The appellants say this entitles them to costs on Column 5. 42 Esprit’s situation is different from those of the other respondents in that it was merely the recipient of a portion of the value of the natural gas wrongfully produced by the working-interest owners. Its liability lay in the law of personal property (a person cannot acquire better title to a chattel than that of the person from whom it received the chattel), not in the law of torts. Esprit also argued that costs against it ought to be pro Stewart Estate v. 1088294 Alberta Ltd. Per curiam 15

rated to the judgment obtained against it. On that basis, we have deter- mined Esprit’s liability for costs as follows: trial costs are $45,000 and appeal costs are $5,000. This assessment of costs also reflects a reduction in the cost we might otherwise have ordered for the fact that Esprit was successful in arguing that it was not jointly and severally liable for the wrongful production by the working-interest owners. As a consequence, Esprit’s liability for costs shall be deducted from the total amount of costs awarded.

E. Offers 43 The appellants’ formal offer of December 29, 2011 specified that it was made to the “defendants and plaintiffs by counterclaim” which at that time were TAQA North Ltd., Nexen, ExxonMobil, Esprit, Bonavista, Triquest and Coastal. 44 The informal offers which followed were not specific but reference is made to “the Defendants” so one can reasonably infer that this encom- passes all the respondents.

1. Trial-related Offers 45 In May 2009 (prior to January 11, 2012, the date the trial com- menced) the appellants made an informal offer of $10.5M. They fol- lowed that with a formal offer of $18M in December 2011, again prior to trial. Given that their success on appeal led to an award greater than the formal offer, the appellants contend that this entitles them to double costs from the date of the formal offer, December 29, 2011. 46 In their costs submissions, Bonavista and Coastal argue that despite the offers of settlement they were compelled to continue producing be- cause they owed a duty to their lessors who at that point had not told them to vacate and who were not parties to the litigation. In making that argument, Bonavista and Coastal misunderstood the effect of the pooling which was required in order to constitute a legal production spacing unit. Bonavista and Esprit, like the other lessees, had no right to produce as soon as any one of the lessors withdrew their consent to continued pro- duction. If one lease in a pooled production spacing unit is terminated, the remaining leases do not necessarily terminate; but production must cease. The remedy of owners of tracts who wish their hydrocarbons pro- duced in the face of a tract owner who does not wish them produced is to apply to the energy regulator for a compulsory pooling order. Their rem- edy is not to continue producing the well. 16 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

47 Bonavista and Coastal also argue the fact they were compelled to de- fend their leases in the absence of a Notice to Vacate by their putative lessors (there being a dispute as to who their lessors were) ought to be a factor in reducing or eliminating cost awards against them. Their argu- ment, once again, was that they were obliged to continue producing. This argument is not persuasive. If Bonavista (through its operator, Nexen) had ceased production, its lessors could have no complaint. There is no obligation upon the lessee under a natural gas lease to produce the leased substances. Leaving the lessors’ molecules in the ground is not actiona- ble. It might cause a lessee to lose its lease. But there would be no re- quirement on the lessee to account to its lessor for not producing. How- ever, producing molecules which one has no right to produce (which is the situation as soon as one owner of a tract in a pool properly withdraws his or her consent to production) triggers the obligation to account to the owner for that production. 48 In conclusion, there is no reason to deny the appellants, including Bowes, the costs consequences of besting their offer. Accordingly, trial costs from the time of the formal offer, December 29, 2011, are doubled.

2. Appeal-related Offers 49 Before the appeal was heard, the appellants made two informal offers of $2.957M (July 2014) and $5.525M (August 2014). They are already bested. 50 The appellants contend that this entitles them to double costs of the appeal hearing. They cite Mahe v. Boulianne, 2010 ABCA 74 (Alta. C.A.) at para 10, 505 A.R. 168, which held that informal offers “can have an effect on costs” and are a relevant consideration when a court exercises it discretion on costs. (We note parenthetically that the Rules Committee has requested input on this topic which may or may not lead to future rule changes.) 51 Nexen/ExxonMobil rely on Rule 4.24 which requires that formal of- fers must use Form 22, specify certain information and be open to ac- ceptance (i.e., unconditional), all of which are lacking in informal offers. They contend that the appellants’ informal offers were conditional on the freeholders’ approval and therefore mere invitations to treat. 52 The July 16, 2014 offer to the respondents began as follows: “I now have instructions from my instructing client group to seek to resolve” the litigation. The letter proposed that “all parties enter into a formal settle- ment agreement to resolve this matter in its entirety on substantially the Stewart Estate v. 1088294 Alberta Ltd. Per curiam 17

following terms...”. The letter also stated that if “this offer is acceptable to your clients, I will need each of the Freeholders to confirm their agree- ment to its terms. However, my understanding is that this will not be an issue and that such confirmation will be forthcoming.” An expiry date was provided. 53 Counsel’s letter of August 26, 2014 noted that he had “instructions from my instructing client group to advance a further offer” and if “this offer is acceptable, I will need final approval from each of the Freehold- ers, but I expect that this will be readily forthcoming”. An expiry date was provided. 54 These informal offers were conditional but there is every indication that acceptance by the respondents would have led to approval by all of the appellants. In our view, these informal offers were a sincere attempt to settle the dispute without the need for a lengthy appeal hearing. Ac- cordingly, we allow a doubling of the costs of the appeal hearing (the only step taken after the offers).

F. Liability - Joint and Several or Pro Rata in Accordance with Damages 55 The appellants submit that costs should be awarded against all of the respondents jointly and severally, leaving apportionment to them. 56 As noted above, we have already made an exception for Esprit for all but the overriding royalty volumes. 57 Coastal suggests that if costs are awarded they should not be awarded against all of the respondents jointly and severally. More specifically, Coastal should be liable for reduced or single Column 5 costs attributable to it. Costs and disbursements common to all the respondents ought to be allocated pro rata in proportion to the damages payable by each respon- dent. Coastal also distinguishes itself from the other respondents: it is a small privately held company which dealt with Snell/Wheatland as les- sors. It was not added as a defendant until June 2006. It also notes that many of the statements made in the appellants’ brief about the respon- dents’ conduct before and during trial are simply not applicable to Coastal. 58 We have found the respondents (other than Esprit) jointly and sever- ally liable for the damages. We see no principled basis upon which to make liability for costs any different. It is open to the respondents to determine among themselves the portion of costs for which each is re- sponsible but this ought not to be the appellants’ responsibility. 18 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

59 We direct that after deducting the Esprit amounts in accordance with our direction in the section above, the remaining respondents including Coastal are jointly and severally liable for the balance.

III. Conclusion 60 Costs related to the Bowes’ trial costs have been set out above at para 37. Bowes is also entitled to double costs for trial preparation and trial which means he is entitled to $100,000 in costs. Costs related to the ap- pellant-lessors’ trial and appeal costs are set out below. Esprit’s costs liability, $100,000 when doubled for the bested offers, shall be deducted from the amounts set out below. What remains after that deduction shall be the joint and several liability of the remaining respondents. So, with respect to recoverable fees, we would approve a Bill of Costs as follows: Item # Item description Tariff Multiplier of Formal Amount two offer 1(1) Commencement 3,500 7,000 -- documents 3(1) Disclosure 1,500 3,000 -- 3(2) Review of op- 7,500 15,000 -- posite party documents 5(1) Preparation for 1,500 3,000 -- Questioning 5(2),(3) Questioning 48,500 97,000 -- 7(1) Contested appli- 1,500 3,000 6,000 cation 9(1) Trial readiness 3,000 6,000 -- and case man- agement (three meetings) 10(1) Trial prepara- 10,000 20,000 40,000 tion 11 Trial 113,250 226,500 453,000 Stewart Estate v. 1088294 Alberta Ltd. Per curiam 19

Item # Item description Tariff Multiplier of Formal Amount two offer 12 Written argu- 15,000 30,000 60,000 ment - brief, re- ply brief and costs submis- sions Total Trial Costs $205,250 $410,500 $690,000 18 Notice of Ap- 600 1,200 -- peal and speak to list 19 Prep (factum, 20,000 40,000 -- reply factum, other) 20 First half day 4,500 9,000 18,000 appearance for two counsel 21 Each full half 7,200 14,400 28,800 day appearance (x3) with sec- ond counsel 22 Contested appli- 2,500 5,000 -- cation Total Appeal Costs $34,800 $69,600 $93,000 61 With respect to entitlement to and liability for these recoverable fees, the following may be of assistance to the parties: Entitlement to Recoverable (Scheduled “C”) Fees Appellant-Lessors $783,000 (from the respondent-lessees and Espirt) Bowes $100,000 (from Nexen and ExxonMobil) Esprit (solely) $100,000 Bonavista (jointly $683,000 and severally with the other lessees) 20 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Coastal (jointly and $683,000 severally with the other lessees) Nexen and Exx- $683,000 onMobil (jointly and severally with the other lessees) (jointly and sever- $100,000 ally with each oth- er) 62 We also received submissions questioning and contesting some of the appellants-lessors’ disbursements. The reasonableness of some of the disbursements, as well as the liability of some of the respondents to pay them, was questioned. We would adopt with the submission of Nexen and ExxonMobil who suggested that disputed disbursements should be reviewed by an assessment officer who can properly assess the reasona- bleness of such disbursements in light of the appellant-lessors’ reasons for incurring same and in light of their supporting documentation. Armed with that information, the assessment officer should also be in a position to assess whether liability for any particular disbursement ought to be attributable to a specific respondent. We would therefore direct that an assessment officer assess the disbursements sought to be recovered in accordance with the rules governing the assessment of such costs. 63 We thank the parties for their submissions; but there will be no costs awarded for the costs incurred by any of them in connection with this assessment of costs by the court. Order accordingly. Stewart Estate v. 1088294 Alberta Ltd. Per curiam 21

Appendix 1 — Multiplier Cases

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? RVB Man- Action to re- $25 million None 2 Column 5 agements cover dam- after amend- Ltd v Rocky ages ment of Mountain resulting claim. House from the di- (Town), version of 2015 ABCA water, which 304, 259 created ACWS (3d) remediation 247. costs and de- lays in de- veloping land. Hill v Hill, Dispute over $17.5 mil- Incessant 4 Column 5 2013 ABCA alleged ap- lion, plus misconduct for first part 313, 3 Alta pointment of disgorgement by the plain- of trial. LR (6th) shares held of profits or tiff, rooted 302. by a discre- income over in a host of tionary trust. 30 years. grave but unfounded allegations of miscon- duct and se- rious impropriety he made about the de- fendants: pa- ras 19, 52. 3 Column 5 for second part. 22 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? Freyberg v Appellant Not deter- None 2 Column 5 Fletcher sought a mined, but (for the trial Challenge declaration set at Col- and the ap- Oil & Gas that a free- umn 5. peal) Inc, 2006 hold petrole- ABCA 260, um and 397 AR 235. natural gas lease had terminated, as well as an accounting of the pro- ceeds of pro- duction from that well. Shefsky v Oppression No monetary Alleged that None California action relief sought, the appli- Gold Mining brought pur- but Thomas cants im- Inc, 2015 suant to a J awarded properly ABQB 525, dispute over costs under delayed 258 ACWS control of a Column 5: serving no- (3d) 491. corporation’s paras 19-20. tice of the board of di- application, rectors by an resulting in investor. increased costs: para 9. Thomas J. rejected this submission: paras 30-33. Stewart Estate v. 1088294 Alberta Ltd. Per curiam 23

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? Blaze Ener- Parties co- Interference Allegations 1.5 Column gy Ltd v Im- owned a gas with transac- of bad faith 5 perial Oil plant and tions worth and miscon- Resources, parcel of $968 mil- duct during 2014 ABQB land. The lion. the litigation 509, [2014] sale of one were made, AJ No 916. party’s inter- but not re- est was al- lied upon by leged to the trial violate the judge: paras other party’s 16, 21, 34, right of first 84. refusal. Cogent Claim for $1,057,426 Unsuccessful None Group Inc v breach of party alleged EnCana contract aris- that the suc- Leasehold ing out of cessful party Limited the termina- had acted in Partnership, tion of a an egregious 2014 ABQB contract to and high- 593, 13 Alta provide ser- handed man- LR (6th) vices relat- ner: para 17. 166. ing to the construction of an office tower. 24 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? 321665 Al- Anti-compet- Damages of None 3 Column 5 berta Ltd v itive beha- $5 million ExxonMobil viour awarded, Canada Ltd, contrary to with $1 mil- 2012 ABQB section 36 of lion in puni- 76, 529 AR the Competi- tive 276 tion Act in damages. relation to oilfield fluids haul- ing. Bhasin v Dispute aris- $455,064 in Allegation 4 (for ques- Hrynew, ing out of damages that the de- tioning, trial 2012 ABQB the interpre- awarded. fendants ex- time and tri- 427, 72 Alta tation of a cessively al prepara- LR (5th) 16 clause in a delayed the tion) standard proceedings form con- up to trial, tract and the but this was breach of an rejected by implied term the trial of good judge: paras faith. 10, 14.Col- umn Trial judge did, howev- er, take into account the defendants’ failure to provide ma- terial docu- ments: para 15. Stewart Estate v. 1088294 Alberta Ltd. Per curiam 25

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? Trial judge also consid- ered the de- fendants misconduct prior to the litigation: paras 16-20. Nexxtep Re- Dispute aris- Not speci- Court de- 3 Column 5 sources Ltd ing from the fied (suffi- clined to ele- v Talisman purchase of cient for vate costs Energy Inc, petroleum column 5). due to alle- 2012 ABQB and natural gations of 708, 77 Alta gas rights in bad conduct: LR (5th) 16 certain for- para 28. mations. Is- sue related to a well producing from the wrong pool. Eaton v Application Approxi- Defendants 3 Column 5 HMS Finan- with respect mately $5 took an un- (but only for cial Inc, to funds held million reasonable Item 7). 2010 ABQB as fruits of USD. position with 364, 486 AR an alleged no discern- 131 Ponzi able merit scheme. that war- ranted multi- plied costs as a deter- rent: paras 17-20. 26 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Case Nature of Damages Bad Multiple the Dispute Sought Conduct Applied Justifying Multiplied Costs? Marathon Nonpayment Claim for None 3 Column 5 Canada Ltd under a nat- $506,007.94, v Enron ural gas counterclaim Canada purchase for $126 Corp, 2008 agreement. million. ABQB 770, 447 AR 89 Klemke Min- Breach of $22,005,122 None 2 Column 5 ing Corp v contract in damages Shell Cana- claim arising awarded. da Ltd, 2007 out of an ABQB 427, agreement [2007] AJ relating to No 693 mining and consulting work for a project in the Athabas- ca oil sands. Malton v. Attia 27

[Indexed as: Malton v. Attia] Janette Malton and John Malton, Respondents (Plaintiffs) and Ashraf S. Attia also known as Sam Attia and Attia Reeves Tensfeldt Snow, Appellants (Defendants) Alberta Court of Appeal Docket: Appeal 1503-0075-AC 2016 ABCA 130 Marina Paperny, Brian O’Ferrall, Barbara Lea Veldhuis JJ.A. Heard: March 4, 2016 Judgment: April 29, 2016 Administrative law –––– Requirements of natural justice — Right to hear- ing — Procedural rights at hearing — Opportunity to respond and make submissions –––– Plaintiff clients retained defendants lawyer and law firm to re- present them in action they brought against home inspector — Clients were not happy with result and brought action against lawyer and law firm for profes- sional negligence and breach of contract — Trial judge determined that lawyer and law firm breached duty of reasonable care and skill in conduct of inspector action and awarded clients damages of $519,000 and awarded non-party legal aid society $25,000 in punitive damages — Trial judge awarded clients in- creased costs based on litigation misconduct — Lawyer and law firm ap- pealed — Appeal allowed; new trial ordered — Trial was procedurally unfair as trial judge did not comply with rules of natural justice by being unbiased and giving parties adequate notice and opportunity to be heard — There were several instances where lawyer and law firm were not given adequate opportunity to know and meet case against them and where trial judge stepped outside her ap- propriate role as impartial arbitrator — Trial judge drew important assumptions and conclusions, central to finding of liability and assessment of damages, that were not based on pleadings, evidence or arguments, and to which lawyer and law firm were not given adequate opportunity to respond — Some of trial judge’s conclusions amounted to serious findings of misconduct by lawyer and law firm, many of which were unduly harsh and unwarranted, were not sup- ported by evidence and could not stand. Professions and occupations –––– Barristers and solicitors — Negligence — In conduct of action — Miscellaneous –––– Plaintiff clients retained defend- ants lawyer and law firm to represent them in action they brought against home inspector — Clients were not happy with result and brought action against law- yer and law firm for professional negligence and breach of contract — Trial judge determined that lawyer and law firm breached duty of reasonable care and 28 ALBERTA LAW REPORTS 35 Alta. L.R. (6th) skill in conduct of inspector action and awarded clients damages of $519,000 and awarded non-party legal aid society $25,000 in punitive damages — Trial judge held that lawyer’s litigation practices were substandard, in that he did not docket time, did not keep notes of his meetings with clients or obtain instruc- tions from clients, did not advise clients of potential damages, how to mitigate damages by selling house, or to obtain expert evidence, and did not present pho- tographic evidence as to state of home — Trial judge found that, had lawyer met standard of care, clients would likely have been awarded full measure of dam- ages — Trial judge held that lawyer was responsible for loss of opportunity to invest — Lawyer and law firm appealed — Appeal allowed; new trial or- dered — Trial judge developed alternative theory that, had clients received proper legal advice, they would have sold house so damages would have crystal- lized before trial, and would have only spent monies needed to mitigate loss — Trial judge found lawyer and law firm were liable for this alternate scenario, even though clients did not testify that they would have proceeded in this fash- ion — Detailed theory of liability and damages was not presented to parties, so lawyer and law firm were not given opportunity to respond — Trial judge breached rules of natural justice in advancing her own theory of liability and damages on basis that was not pleaded or argued. Professions and occupations –––– Barristers and solicitors — Negligence — Penalties for negligence –––– Plaintiff clients retained defendants lawyer and law firm to represent them in action they brought against home inspector — Cli- ents were not happy with result and brought action against lawyer and law firm for professional negligence and breach of contract — Trial judge determined that lawyer and law firm breached duty of reasonable care and skill in conduct of inspector action and awarded clients damages of $519,000 and awarded non- party legal aid society $25,000 in punitive damages — Trial judge found that clients did not prove that health problems stemmed from living in unsafe home — Trial judge established value of house and investments lost at $359,000, for which lawyer was directly responsible — Trial judge awarded $75,000 for general damages for stress and anxiety due to action and its out- come — Trial judge held that lawyer’s misconduct in misleading clients and Law Society warranted punitive damages — Lawyer and law firm appealed — Appeal allowed; new trial ordered — Trial judge breached rules of natural jus- tice by not giving lawyer and law firm opportunity to respond to alternative sce- nario or to claim for punitive damages — Trial judge developed alternative the- ory that, had clients received proper legal advice, they would have sold house so damages would have crystallized before trial, and would have only spent monies needed to mitigate loss — Trial judge found lawyer and law firm were liable for this alternate scenario, even though clients did not testify that they would have proceeded in this fashion — Trial judge decided on her own motion to amend clients’ pleadings to allow for award of punitive damages — Punitive damages awards lacked foundation in evidence and in law. Malton v. Attia 29

Remedies –––– Damages — Exemplary, punitive and aggravated dam- ages — Grounds for awarding exemplary, punitive and aggravated dam- ages — Breach of fiduciary duty –––– Plaintiff clients retained defendants law- yer and law firm to represent them in action they brought against home inspector — Clients were not happy with result and brought action against law- yer and law firm for professional negligence and breach of contract — Trial judge determined that lawyer and law firm breached duty of reasonable care and skill in conduct of inspector action and awarded clients damages of $519,000, including $10,000 in punitive damages, and awarded non-party legal aid society $25,000 in punitive damages — Trial judge held that lawyer’s misconduct in misleading clients and Law Society in response to complaint warranted punitive damages — Trial judge held that lawyer’s breach of solicitor-client privilege re- specting handwritten notes on back of pages containing information from unre- lated clients warranted punitive damages to legal aid society — Lawyer and law firm appealed — Appeal allowed; new trial ordered — Trial judge breached rules of natural justice in awarding punitive damages by depriving lawyer and law firm opportunity to respond — Statement of claim did not seek punitive damages and trial judge decided on her own motion to amend clients’ pleadings to allow for award of punitive damages — Punitive damages awards lacked foundation in evidence and in law — Breach of unrelated client’s confidence was careless, but not deliberate — It was unprecedented to award punitive dam- ages to person or group that was not party to action — Lawyer and law firm were not given adequate notice of possibility of finding of misconduct or oppor- tunity to respond to allegations. Civil practice and procedure –––– Costs — Scale and quantum of costs — Miscellaneous –––– Full indemnity — Plaintiff clients retained defendants law- yer and law firm to represent them in action they brought against home inspec- tor — Clients were not happy with result and brought action against lawyer and law firm for professional negligence and breach of contract — Trial judge deter- mined that lawyer and law firm were negligent and awarded damages — Trial judge awarded clients Schedule C costs and second counsel fees for steps taken while they were self-represented, full indemnity for steps taken while they were represented by counsel, $2,500 for late disclosure of documents, and $20,000 in punitive costs — Trial judge awarded costs on basis of litigation misconduct on part of lawyer and law firm, including failure to disclose relevant documents, inadequate and misleading legal research, and request to make preliminary rul- ing as to whether clients failed to establish standard of care by not providing expert evidence — Lawyer and law firm appealed — Appeal allowed; new trial ordered — Findings of litigation misconduct could not stand — Lawyer and law firm were not given adequate opportunity to respond to alleged misconduct — There was insufficient basis on which impugned actions of lawyer, law firm and their counsel could be characterized as deliberate misconduct intended to deceive court, defeat justice, hinder proceeding or harm clients — There was no 30 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

basis to attribute any improper motives to lawyer and law firm with respect to preliminary application — Lawyer’s late disclosure of notes was example of poor file management, not deliberate attempt to evade disclosure, so there was no basis to classify conduct as serious litigation misconduct — There was no basis for concluding that any failure to provide additional case law was deliber- ate and unethical. Administrative law –––– Requirements of natural justice — Bias — Per- sonal bias — Apprehended –––– Plaintiff clients retained defendants lawyer and law firm to represent them in action they brought against home inspector — Clients were not happy with result and brought action against lawyer and law firm for professional negligence and breach of contract — Clients were self-rep- resented — Trial judge determined that lawyer and law firm breached duty of reasonable care and skill in conduct of inspector action and awarded clients damages of $519,000, including pecuniary, general and punitive damages, and awarded non-party legal aid society $25,000 in punitive damages — Trial judge awarded clients increased costs based on litigation misconduct — Lawyer and law firm appealed — Appeal allowed; new trial ordered — Trial was procedur- ally unfair — Numerous unjustified criticisms of and adverse findings against lawyer and law firm raised concern that trial judge was predisposed against them — Taken individually, various adverse findings and criticisms would not be able to withstand appellate review, but they would not necessarily lead to reasonable apprehension of bias — Taken cumulatively, adverse findings and criticisms pointed to animus against lawyer and law firm — Trial judge’s sus- tained reaction to lawyer and law firm’s decision to apply for and appeal prelim- inary ruling was illustrative of issue, and problem continued with awards for punitive damages and findings of litigation misconduct leading to increased costs. Cases considered: A. (J.M.) v. Child & Family Services (2004), 2004 MBCA 184, 2004 CarswellMan 522, (sub nom. (Director of Child & Family Services) v. A. (J.)) 247 D.L.R. (4th) 490, (sub nom. Director of Child & Family Services (Man.) v. J.A.) 190 Man. R. (2d) 298, (sub nom. Director of Child & Family Services (Man.) v. J.A.) 335 W.A.C. 298, [2005] 4 W.W.R. 652, [2004] M.J. No. 451 (Man. C.A.) — considered A. (L.L.) v. B. (A.) (1995), 103 C.C.C. (3d) 92, 44 C.R. (4th) 91, 130 D.L.R. (4th) 422, 190 N.R. 329, 33 C.R.R. (2d) 87, [1995] 4 S.C.R. 536, 88 O.A.C. 241, 1995 CarswellOnt 955, 1995 CarswellOnt 1188, [1995] S.C.J. No. 102, EYB 1995-67686 (S.C.C.) — referred to Baker v. Canada (Minister of Citizenship & Immigration) (1999), [1999] S.C.J. No. 39, 174 D.L.R. (4th) 193, 1999 CarswellNat 1124, 1999 CarswellNat 1125, 243 N.R. 22, 1 Imm. L.R. (3d) 1, 14 Admin. L.R. (3d) 173, [1999] 2 S.C.R. 817, [1999] F.C.J. No. 39 (S.C.C.) — referred to Malton v. Attia 31

Canada Trustco Mortgage Co. v. Renard (2008), 2008 BCCA 343, 2008 Car- swellBC 1888, 71 R.P.R. (4th) 1, 60 C.P.C. (6th) 11, 83 B.C.L.R. (4th) 267, 298 D.L.R. (4th) 216, 259 B.C.A.C. 140, 436 W.A.C. 140, 60 C.P.C. (4th) 11, [2008] B.C.J. No. 1704 (B.C. C.A.) — considered Cicciarella v. Cicciarella (2009), 2009 CarswellOnt 3972, 252 O.A.C. 156, 72 R.F.L. (6th) 319, [2009] O.J. No. 2906 (Ont. Div. Ct.) — considered Cold Lake First Nations v. Alberta (Minister of Tourism, Parks & Recreation) (2012), 2012 ABCA 36, 2012 CarswellAlta 179, 522 A.R. 159, 544 W.A.C. 159, 64 Alta. L.R. (5th) 201, [2012] A.J. No. 96 (Alta. C.A.) — referred to Committee for Justice & Liberty v. Canada (National Energy Board) (1976), [1978] 1 S.C.R. 369, 68 D.L.R. (3d) 716, 9 N.R. 115, 1976 CarswellNat 434, 1976 CarswellNat 434F, [1976] S.C.J. No. 118, [1976] A.C.S. No. 118 (S.C.C.) — followed Davids v. Davids (1999), 1999 CarswellOnt 3304, 125 O.A.C. 375, [1999] O.J. No. 3930, 87 O.T.C. 80 (Ont. C.A.) — considered Dool v. Nazarewycz (2009), 2009 ABCA 70, 2009 CarswellAlta 252, 2 Alta. L.R. (5th) 36, 46 E.T.R. (3d) 159, (sub nom. Dool Estate, Re) 448 A.R. 1, (sub nom. Dool Estate, Re) 447 W.A.C. 1, [2009] 7 W.W.R. 636, [2009] A.J. No. 189 (Alta. C.A.) — referred to I.W.A., Local 2-69 v. Consolidated Bathurst Packaging Ltd. (1990), 42 Admin. L.R. 1, 68 D.L.R. (4th) 524, 105 N.R. 161, 38 O.A.C. 321, 90 C.L.L.C. 14,007, [1990] O.L.R.B. Rep. 369, (sub nom. I.W.A. v. Consolidated- Bathurst Packaging Ltd.) [1990] 1 S.C.R. 282, 73 O.R. (2d) 676 (note), 1990 CarswellOnt 2515, 1990 CarswellOnt 821, [1990] S.C.J. No. 20, EYB 1990- 67694 (S.C.C.) — considered Jackson v. Trimac Industries Ltd. (1993), 8 Alta. L.R. (3d) 403, 138 A.R. 161, [1993] 4 W.W.R. 670, 1993 CarswellAlta 310, [1993] A.J. No. 218 (Alta. Q.B.) — considered Jackson v. Trimac Industries Ltd. (1994), 20 Alta. L.R. (3d) 117, [1994] 8 W.W.R. 237, 155 A.R. 42, 73 W.A.C. 42, 1994 CarswellAlta 135, [1994] A.J. No. 445 (Alta. C.A.) — referred to Jensen v. Ross (2014), 2014 BCCA 173, 2014 CarswellBC 1177, 58 B.C.L.R. (5th) 286, 373 D.L.R. (4th) 656, 354 B.C.A.C. 289, 605 W.A.C. 289, [2014] 10 W.W.R. 732 (B.C. C.A.) — considered Max Sonnenberg Inc. v. Stewart, Smith (Canada) Ltd. (1986), 48 Alta. L.R. (2d) 367, [1987] 2 W.W.R. 75, 1986 CarswellAlta 247, [1986] A.J. No. 1036 (Alta. Q.B.) — considered Miglin v. Miglin (2003), 2003 SCC 24, 2003 CarswellOnt 1374, 2003 Carswell- Ont 1375, [2003] S.C.J. No. 21, 34 R.F.L. (5th) 255, 224 D.L.R. (4th) 193, 302 N.R. 201, 171 O.A.C. 201, [2003] 1 S.C.R. 303, REJB 2003-40012, 66 O.R. (3d) 736, 2003 CSC 24 (S.C.C.) — referred to 32 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Olson v. New Home Certification Program of Alberta (1986), 44 Alta. L.R. (2d) 207, 69 A.R. 356, 1986 CarswellAlta 64, [1986] A.J. No. 347 (Alta. Q.B.) — considered P. (M.N.) (Next Friend of) v. Whitecourt General Hospital (2006), 2006 ABCA 245, 2006 CarswellAlta 1071, 64 Alta. L.R. (4th) 1, [2006] 12 W.W.R. 397, 397 A.R. 333, 384 W.A.C. 333, (sub nom. M.N.P. v. Bablitz) [2006] A.J. No. 1041 (Alta. C.A.) — referred to R. v. Bertram (1989), [1989] O.J. No. 2123, 1989 CarswellOnt 1511 (Ont. H.C.) — considered R. v. Mohan (1994), 29 C.R. (4th) 243, 71 O.A.C. 241, 166 N.R. 245, 89 C.C.C. (3d) 402, 114 D.L.R. (4th) 419, [1994] 2 S.C.R. 9, 18 O.R. (3d) 160 (note), 1994 CarswellOnt 66, 1994 CarswellOnt 1155, [1994] S.C.J. No. 36, EYB 1994-67655 (S.C.C.) — referred to R. v. S. (R.D.) (1997), 1997 CarswellNS 301, 1997 CarswellNS 302, 151 D.L.R. (4th) 193, 118 C.C.C. (3d) 353, 10 C.R. (5th) 1, 218 N.R. 1, 161 N.S.R. (2d) 241, 477 A.P.R. 241, [1997] 3 S.C.R. 484, 1 Admin. L.R. (3d) 74, [1997] S.C.J. No. 84 (S.C.C.) — referred to Roberts v. R. (2003), 2003 SCC 45, 2003 CarswellNat 2822, 2003 CarswellNat 2823, 231 D.L.R. (4th) 1, (sub nom. Wewaykum Indian Band v. Canada) [2003] S.C.J. No. 50, 19 B.C.L.R. (4th) 195, (sub nom. Wewayakum Indian Band v. Canada) 309 N.R. 201, [2004] 2 W.W.R. 1, 40 C.P.C. (5th) 1, 7 Admin. L.R. (4th) 1, (sub nom. Wewaykum Indian Band v. Canada) [2004] 1 C.N.L.R. 342, (sub nom. Wewayakum Indian Band v. Canada) [2003] 2 S.C.R. 259, REJB 2003-47809 (S.C.C.) — considered Rodaro v. Royal Bank (2002), 2002 CarswellOnt 1047, 22 B.L.R. (3d) 274, 157 O.A.C. 203, 49 R.P.R. (3d) 227, 59 O.R. (3d) 74, [2002] O.J. No. 1365, [2002] O.T.C. 442 (Ont. C.A.) — considered Thoreson v. Alberta (Minister of Infrastructure) (2014), 2014 ABCA 31, 2014 CarswellAlta 117, 112 L.C.R. 16, 569 A.R. 63 (Alta. C.A.) — referred to Vorvis v. Insurance Corp. of (1989), 25 C.C.E.L. 81, [1989] 1 S.C.R. 1085, [1989] 4 W.W.R. 218, 58 D.L.R. (4th) 193, 94 N.R. 321, 36 B.C.L.R. (2d) 273, 42 B.L.R. 111, 90 C.L.L.C. 14,035, 1989 CarswellBC 76, 1989 CarswellBC 704, [1989] S.C.J. No. 46, EYB 1989-66980 (S.C.C.) — referred to Waterman v. Waterman (2014), 2014 NSCA 110, 2014 CarswellNS 930, 379 D.L.R. (4th) 64, [2003] M.J. No. 44, 80 Admin. L.R. (5th) 288, 1127 A.P.R. 36, 357 N.S.R. (2d) 36 (N.S. C.A.) — referred to Whighton v. Integrity Inspections Inc. (2007), 2007 ABQB 175, 2007 Carswell- Alta 376, 71 Alta. L.R. (4th) 112, [2007] 5 W.W.R. 492, 46 C.C.L.T. (3d) 95, 418 A.R. 222 (Alta. Q.B.) — referred to Whiten v. Pilot Insurance Co. (2002), 2002 SCC 18, 2002 CarswellOnt 537, 2002 CarswellOnt 538, [2002] I.L.R. I-4048, 20 B.L.R. (3d) 165, [2002] S.C.J. No. 19, 209 D.L.R. (4th) 257, 283 N.R. 1, 35 C.C.L.I. (3d) 1, 156 Malton v. Attia The Court 33

O.A.C. 201, [2002] 1 S.C.R. 595, REJB 2002-28036, 58 O.R. (3d) 480 (note), 2002 CSC 18 (S.C.C.) — referred to Williams v. Williams (2015), 2015 ABCA 246, 2015 CarswellAlta 1330, 64 R.F.L. (7th) 1, 23 Alta. L.R. (6th) 303, 602 A.R. 376, 647 W.A.C. 376 (Alta. C.A.) — considered 460635 Ontario Ltd. v. 1002953 Ontario Inc. (1999), 1999 CarswellOnt 3428, 127 O.A.C. 48, [1999] O.J. No. 4071 (Ont. C.A.) — considered

APPEAL by lawyer and law firm from judgment reported at Malton v. Attia (2015), 2015 ABQB 135, 2015 CarswellAlta 315, 63 C.P.C. (7th) 270, [2015] 4 W.W.R. 260, 17 C.C.L.T. (4th) 25, 10 Alta. L.R. (6th) 1, 611 A.R. 200 (Alta. Q.B.), allowing former clients’ action in negligence, and from judgment re- ported at Malton v. Attia (2015), 2015 ABQB 430, 2015 CarswellAlta 1240, 19 C.C.L.T. (4th) 217, 76 C.P.C. (7th) 161, 19 Alta. L.R. (6th) 1, [2016] 3 W.W.R. 778, 611 A.R. 315 (Alta. Q.B.), awarding costs.

P.G. Kirman, for Respondents P.A. Smith, Q.C. (agent), for F.V. Cox, for Appellants

The Court: Introduction 1 The appellants, a lawyer and his law firm, were sued by their former clients (the respondents) for negligence in conducting a trial on their be- half. The appellants were represented by counsel in the negligence trial. The respondents were self-represented. The sole issue on this appeal is whether, in the circumstances, that trial was procedurally fair. 2 Self-represented litigants appear with increasing frequency in our trial courts. In response, courts have made procedural reforms to facilitate ef- fective and efficient dispute resolution. However, the fundamentals of trial process have not changed. A fair hearing requires an impartial, inde- pendent adjudicator. It requires that parties know the case they have to meet, have the opportunity to martial evidence to meet it, and the oppor- tunity to make submissions with respect to it. These are core elements of our justice system. 3 These basic requirements can pose a challenge to the trial judge pre- siding over a trial with self-represented litigants. He or she must care- fully walk the line between being of assistance to those litigants and be- coming their advocate. This dynamic was very much at play in this trial. The appellants argue that the trial judge stepped over the line and de- scended into the arena. They submit that this resulted in an unfair trial. 34 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

They ask this Court to allow their appeal and return the matter for a new trial. 4 For the reasons that follow, we conclude that a new trial must be ordered.

Background 5 The appellants were sued by the respondents for negligently repre- senting them in a lawsuit against the inspector of a house they had pur- chased. The trial judge found the appellants negligent and awarded them $519,000 in damages, including $10,000 in punitive damages. She also ordered the appellants to pay a further $25,000 in punitive damages to the Legal Aid Society of Alberta, which was not a party to the action: see 2015 ABQB 135 (Alta. Q.B.). 6 In a subsequent decision on costs (2015 ABQB 430 (Alta. Q.B.)), the trial judge awarded full Schedule “C” costs and second counsel fees to the respondents, who had been largely self-represented at trial, full in- demnity for specific services provided to them by a law firm, and an additional $22,500 in costs for misconduct by the appellants and their counsel during the trial. 7 The appellants appeal the trial decision and the costs award. They argue that the manner in which both decisions were made was procedur- ally unfair; specifically, that the trial judge made findings and drew con- clusions adverse to the appellants without giving them an adequate op- portunity to respond, that she improperly descended into the arena of litigation, and that the conduct and comments of the trial judge give rise to a reasonable apprehension of bias.

Procedural History The underlying action against the house inspector: 2007 ABQB 175 (Alta. Q.B.) 8 In 2000, the respondents purchased a house in Stony Plain, Alberta for $180,000. The purchase was conditional on a satisfactory home in- spection. The respondents retained Integrity Inspections Incorporated (HouseMaster) to conduct the inspection, which was completed in April 2000. After the respondents moved into the house, they discovered sev- eral serious problems, including structural problems, rot, mould, and risk of septic backup. Malton v. Attia The Court 35

9 The respondents took the position that these defects should have been observed and reported in the home inspection. In 2001, the respondents retained the appellants to sue the inspector in contract and tort. 10 The action against the inspector went to trial in 2006: Whighton v. Integrity Inspections Inc., see 2007 ABQB 175, 418 A.R. 222 (Alta. Q.B.) [the Inspector Action]. The trial judge found the inspector liable. He awarded the respondents approximately $38,000 in damages, which was less than the $107,000 claimed and less than the respondents had spent on repairing the house. The respondents were very dissatisfied with the amount of damages awarded.

The action for professional negligence and breach of contract 11 In 2008, the respondents launched the present litigation, in which they sued a number of professionals, including several dentists, doctors, and the Province of Alberta, in addition to the appellants. The dental pro- fessionals were sued for negligence in their treatment of dental pain and a poor taste in the female respondent’s mouth. Negligence actions were also brought against three doctors and their associated professional cor- porations and medical clinics, for complaints relating to the female re- spondent’s treatment. The action against the appellants alleged negli- gence and breach of contract in their conduct of the Inspector Action. The province was sued for failing to ensure these professionals did not harm the respondents and for failing to ensure reasonable access to justice. 12 The respondents sought just under $1,000,000 in damages against all the defendants in the negligence action. The trial of that action took place in April and May 2013. The respondents were self-represented for much of the litigation, although they retained counsel for some specific services. 13 The negligence action was summarily dismissed as against the prov- ince and the dental professionals prior to the start of trial. The action against the other medical professionals was settled at the close of the plaintiffs’ case, and dismissed without costs. The only remaining defend- ants were, therefore, the appellants. 14 The allegations against the appellants in the statement of claim all address the handling of the Inspector Action and include allegations of inadequate trial preparation, failure to proceed with the trial in a timely way, failure to adequately pursue and prove damages at trial, and negli- gent advice with respect to appealing the judgment. The respondents’ ev- 36 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

idence consisted of their own testimony, the evidence of counsel for the defendant in the Inspector Action, and the evidence of an air quality in- spector who testified to the presence of mould in the house. 15 The respondents did not adduce expert evidence on the standard of care owed by a lawyer in conducting this type of litigation. At the con- clusion of the trial (but before final arguments), counsel for the appel- lants sought a preliminary ruling on whether the negligence action must fail because of the lack of expert evidence on the standard of care issue. Counsel proposed that closing argument proceed on that issue first, and then on liability and damages if necessary. Presumably, closing argument on liability and damages would not be necessary if the appellants were successful on the preliminary point. The trial judge agreed to this procedure. 16 The trial judge issued her ruling on the preliminary issue in October 2013. She held that the respondents did not need to adduce expert evi- dence on standard of care in order to establish that the appellants’ repre- sentation of them was negligent: see Malton v. Attia, 2013 ABQB 642, 573 A.R. 200 (Alta. Q.B.). She concluded that expert evidence on the standard of care of a lawyer is admissible only when necessary (citing R. v. Mohan, [1994] 2 S.C.R. 9, 114 D.L.R. (4th) 419 (S.C.C.)), and re- jected arguments that it is inappropriate for a trial judge to act as her own expert in cases of lawyer negligence. She concluded that she did not re- quire expert evidence on standard of care to evaluate the allegations made against the appellants. 17 Following her ruling on the preliminary issue, the trial judge heard from the parties about scheduling the balance of the closing argument. At that point, the appellants advised the trial judge that they had filed an appeal of the preliminary ruling. We note that the prospective appeal was interlocutory in nature and, under the Practice Directions then in force, leave to appeal from this Court was required but had not been sought. 18 The trial judge was surprised when she heard of the appellants’ inten- tion to appeal the preliminary ruling. She had apparently assumed that the parties would settle if her ruling on the preliminary issue was not favourable to the appellants. There is nothing on the record to indicate that counsel for the appellants had made a representation to that effect. When told of the pending appeal, the trial judge displayed considerable displeasure and made additional comments that suggested, from the ap- pellants’ perspective, that she was pre-disposed to finding against them and displayed an animus towards them and their counsel. Malton v. Attia The Court 37

19 The appellants submitted that no further steps should be taken in the action until the appeal had been concluded. The trial judge disagreed and proceeded to schedule dates for the closing argument. The appellants withdrew their prospective appeal without seeking leave to appeal from this Court, and closing arguments in the negligence action were filed in December 2013.

The Trial Decision: 2015 ABQB 135 (Alta. Q.B.) 20 The decision on liability and damages was released in February 2015, some 16 months after the preliminary ruling: Malton v. Attia, 2015 ABQB 135, [2015] 4 W.W.R. 260 (Alta. Q.B.). The trial judge held that the appellants breached their duty of reasonable care and skill in their conduct of the Inspector Action. She awarded a total of $519,000 in dam- ages (comprising pecuniary, general and punitive damages) to the re- spondents, and awarded an additional $25,000 in punitive damages to be paid to the Legal Aid Society of Alberta. 21 The trial judge found that the individual appellant misunderstood the law on damages and mitigation, failed to retain the experts necessary to inform a proper litigation strategy, and improperly advised the respon- dents to repair the house and then seek damages for the cost of the re- pairs rather than selling the house and suing for the difference between the price they had paid for the house and its actual value. The trial judge found that these and other errors by the appellant amounted to negligence and breach of contract. 22 The punitive damage awards were based on two findings of miscon- duct. First, the trial judge found the individual appellant had misled the Law Society in his response to the respondents’ 2008 complaint against him. During his testimony at trial, the individual appellant had admitted that there were errors in his response to the Law Society, but denied that the errors were intentional. The trial judge awarded $10,000 in punitive damages to the respondents based on this finding of misconduct. 23 The second punitive damage award emanated from the trial judge’s finding that, during the trial of the negligence action, the individual ap- pellant had disclosed documents that contained information belonging to another, unrelated, client, thereby breaching that client’s solicitor-client privilege. During the trial of the Inspector Action, the appellant had made 106 pages of handwritten notes on scrap paper. The reverse side of two of the pages contained information from another, unrelated client file. Those pages, which were in the appellants’ file for the Law Society 38 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

complaint, were eventually disclosed to the respondents during the negli- gence trial. The trial judge concluded that the appellants breached their duty of confidence to the other client by virtue of this disclosure. She ordered the appellants to pay $25,000 in punitive damages to the Legal Aid Society of Alberta (not a party to the action).

The Costs Decision: 2015 ABQB 430 (Alta. Q.B.) 24 A further hearing on costs followed the issuance of the trial decision. The trial judge awarded the respondents Schedule “C” costs and second counsel fees for steps taken while they were self-represented, full indem- nity for steps taken while they were represented by counsel, $2,500 for late disclosure of documents, and $20,000 in punitive costs: Malton v. Attia, 2015 ABQB 430 (Alta. Q.B.) at para 156, (2015), 19 Alta. L.R. (6th) 1 (Alta. Q.B.). 25 The trial judge’s approach to the costs award was marked by her dis- satisfaction with the conduct and approach of the appellants and their counsel to the negligence trial. She described that conduct in general terms at paras 15-16 of her decision: The defence that the Maltons faced could be characterized as inflexi- ble and aggressive. It was marked with conduct that is inconsistent with the guiding principles of the Alberta Rules of Court ...; breach of the ... reciprocal document disclosure obligations of parties in civil litigation; and incomplete and inaccurate statements of law. I would have expected a lawyer to acknowledge obvious misconduct that was contrary to his professional and ethical obligations without taking his client through extended litigation. In nautical terms, Attia had foisted the red flag and would offer his former clients no quarter. What follows is a discussion of the conduct during the litigation which leads to an increased costs award. 26 The trial judge considered the extent to which the respondents were entitled to costs as self-represented litigants, as well as the appropriate degree of indemnification for legal services they received during the trial. She then discussed the “many and serious” issues with the appel- lants’ conduct that justified an increased costs award. Those issues in- cluded the following: 1. Failure to disclose relevant documents, namely the handwritten Inspector Action trial notes that the individual appellant discov- ered well into the negligence trial but did not disclose until four Malton v. Attia The Court 39

days later. The trial judge found this to be a “particularly obnox- ious breach” of the appellants’ disclosure obligation: para 38. 2. Inadequate and misleading legal research, which she characterized as “woefully incomplete”: para 60. 3. Mischaracterization of the respondents’ trial conduct. The trial judge expressed the opinion that the self-represented respondents had performed better than the appellant had in the Inspector Ac- tion. She said that the appellants’ criticism of the respondents, “is hypocrisy, pure and simple”: para 75. 4. The trial judge was highly critical of the appellants’ request that she issue a preliminary decision on the standard of care issue, which she characterized as a request for her to split the trial, or “litigation by instalment”. She concluded that, if the respondents had been represented, opposing counsel would have challenged that request, and that the actions of the appellants’ counsel “were predatory behaviour that took advantage of the fact the [respon- dents] were self-represented”: para 107. She ordered a lump sum payment of $20,000 in costs to “respond to the delay caused by [the appellants’] abuse of court processes by inviting an inappro- priate preliminary issue determination, his successful attempt to cause litigation by installment and as a consequence delay resolu- tion of this trial”: para 146.

Issues on Appeal 27 The appellants argue that the trial judge failed to comply with the rules of natural justice in two ways: 1. By reaching conclusions on material issues and making findings adverse to the appellants without giving them an opportunity to be heard and make submissions with respect to those issues; 2. By demonstrating animus against the appellants and their counsel that gives rise to a reasonable apprehension of bias.

Standard of Review 28 The appellants allege a breach of audi alterem partem, the principle that a decision maker must give parties the opportunity to be heard and must fully hear each party’s case before rendering judgment. Where pro- cedural unfairness at trial is alleged, the task of the reviewing court is to assess whether the appellants were afforded the procedural opportunities 40 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

required by law: see Baker v. Canada (Minister of Citizenship & Immi- gration), [1999] 2 S.C.R. 817, 174 D.L.R. (4th) 193 (S.C.C.). 29 Some of the errors alleged to have been made by the trial judge relate to findings of litigation misconduct by the appellants and their counsel, which led to the imposition of increased costs. The appellants say many of those findings were made in the absence of any or sufficient eviden- tiary or legal basis. Findings in support of a costs award are subject to deference on appeal unless the trial judge made a palpable error in her assessment of the facts, or committed an error in principle: Thoreson v. Alberta (Minister of Infrastructure), 2014 ABCA 31 (Alta. C.A.) at para 9. 30 Finally, the appellants argue that the conduct of the trial judge, in- cluding the tone of her comments in court and in her written judgments as well as the numerous adverse findings made against them, when con- sidered cumulatively, give rise to a reasonable apprehension of bias. Ap- pellate review for a reasonable apprehension of bias involves scrutiny of the record to determine if a fully informed and reasonable observer could reasonably apprehend, having thought the matter through, that the judge was not fair and impartial: R. v. S. (R.D.), [1997] 3 S.C.R. 484 (S.C.C.); Roberts v. R., 2003 SCC 45, [2003] 2 S.C.R. 259 (S.C.C.) at paras 57-60, 76-78.

Analysis 1. Was the trial procedurally unfair? 31 The role of a trial judge can be especially challenging when one or both parties appearing before the judge is self-represented. The Canadian Judicial Council, recognizing the increased presence of self-represented litigants in the courts, has stated that judges “have responsibility to en- sure that self-represented persons are provided with fair access and equal treatment by the court”: Preamble, Statement of Principles on Self-repre- sented Litigants and Accused Persons, cited by this Court in Williams v. Williams, 2015 ABCA 246, 602 A.R. 376 (Alta. C.A.) at para 38. In Wil- liams, this Court went on to note that promoting equal justice can mean that judges provide information about the law and evidentiary require- ments to self-represented parties. On the other hand, the Principles also state that self-represented litigants are expected to familiarize themselves with relevant legal practices and to prepare their own case. 32 There is a balance to be struck. While affording self-represented liti- gants “leeway” in court, judges must never lose sight of the fact that both Malton v. Attia The Court 41

sides are entitled to a fair trial. Judges must guard against descending into the arena from the bench and advocating for the self-represented liti- gant: see Cicciarella v. Cicciarella (2009), 252 O.A.C. 156, 72 R.F.L. (6th) 319 (Ont. Div. Ct.) at para 37. The Manitoba Court of Appeal de- scribed the challenge in A. (J.M.) v. Winnipeg Child & Family Services, 2004 MBCA 184, 247 D.L.R. (4th) 490 (Man. C.A.) at para 32: The extent to which judges should afford an unrepresented litigant additional “leeway” with respect to court procedures and the rules of evidence is an increasingly vexing problem for courts at all levels. It is generally recognized that the court should provide some assistance to an unrepresented litigant, ... But at the same time this must be done in such a way as not to breach either the appearance or reality of judicial neutrality. ... How to balance the sometimes competing imperatives of helping a litigant who is in need of assistance while maintaining impartiality is a recurring dilemma for both trial and ap- pellate courts. [emphasis added] 33 The Ontario Court of Appeal made the same point in Davids v. Da- vids (1999), 125 O.A.C. 375 (Ont. C.A.) at para 36: fairness requires “that the trial judge treat the litigant fairly and attempt to accommodate unrepresented litigants’ unfamiliarity with the process so as to permit them to present their case. In doing so, the trial judge must, of course, respect the rights of the other party” [emphasis added]. 34 While a trial judge may, therefore, allow some leeway to the self- represented litigant and provide some assistance, particularly in procedu- ral matters, he or she must not become an advocate for that litigant. Nor can a trial judge allow assistance to a self-represented litigant to override the right of a represented litigant to a fair trial. 35 A fair trial must comply with the rules of natural justice, for all par- ties. Those rules have often been described as falling into two categories: “that an adjudicator be disinterested and unbiased (nemo judex in causa sua) and that the parties be given adequate notice and opportunity to be heard (audi alteram partem)”: S.A. De Smith, Judicial Review of Admin- istrative Action, 4th ed by J.M. Evans (London: Stevens, 1980) at 156, cited in I.W.A., Local 2-69 v. Consolidated Bathurst Packaging Ltd., [1990] 1 S.C.R. 282, 68 D.L.R. (4th) 524 (S.C.C.) at para 23 per Gonthier J. Although the rules of natural justice and procedural fairness are most often discussed in the context of administrative tribunals, courts are no less bound to comply with them: see Waterman v. Waterman, 2014 NSCA 110, 379 D.L.R. (4th) 64 (N.S. C.A.) at paras 71-72, citing 42 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

A. (L.L.) v. B. (A.), [1995] 4 S.C.R. 536, 103 C.C.C. (3d) 92 (S.C.C.) at para 27 per L’Heureux Dub´e J. 36 Both aspects of procedural fairness — the need for an impartial adju- dicator and the requirement that parties be given an opportunity to be heard — are at issue on this appeal. We will deal first with the audi al- teram partem rule, and address the alleged lack of impartiality later in these reasons. 37 The essence of the audi alteram partem rule is to give the parties “a fair opportunity of answering the case against them”. On factual matters, parties must be given a “fair opportunity ... for correcting or contra- dicting any relevant statement prejudicial to their view”. On matters of law, parties have the right to state their case adequately and “to answer contrary arguments”: Consolidated Bathurst at para 50. 38 The fundamental principle that parties know the case to be met was discussed in D.P. Jones and A.S. de Villars, Principles of Administrative Law, 5th ed (Toronto: Carswell, 2009) at p 266: The courts have consistently held that a fair hearing can only be had if the persons affected by the tribunal’s decision know the case to be made against them. Only in this circumstance can they correct evi- dence prejudicial to their case and bring evidence to prove their posi- tion. But knowing the case that must be met is not enough, of course; the opportunity to present the other side of the matter must also be allowed. 39 This appeal raises several aspects of this fundamental principle of fairness. For example, courts have emphasized the requirement that law- suits be decided within the boundaries of the pleadings. Basing a deci- sion on an issue not raised in the pleadings “deprives the defendant of the opportunity to address that issue in the evidence at trial”: Rodaro v. Royal Bank (2002), 157 O.A.C. 203, 22 B.L.R. (3d) 274 (Ont. C.A.) at para 60, citing 460635 Ontario Ltd. v. 1002953 Ontario Inc., [1999] O.J. No. 4071 (Ont. C.A.). Particularly problematic is the introduction of a theory of liability for the first time in the reasons for judgment. This has been found to be fundamentally unfair, depriving the defendant of the opportunity to rebut the propositions raised in the judgment by way of cross-examination or through evidence: P. (M.N.) (Next Friend of) v. Whitecourt General Hospital, 2006 ABCA 245, 397 A.R. 333 (Alta. C.A.); see also Rodaro. 40 It is also fundamentally unfair to deprive a party of the right to re- spond when findings of misconduct may be made against him. This point Malton v. Attia The Court 43

was made by the British Columbia Court of Appeal in Canada Trustco Mortgage Co. v. Renard, 2008 BCCA 343, 298 D.L.R. (4th) 216 (B.C. C.A.), where the trial judge found the plaintiffs “complicit in any fraud or illegality” that had occurred, an allegation that had not been made in the pleadings or during the trial. In allowing the appeal, Frankel JA noted at para 38-39: Fairness requires that a trial judge not bring issues into litigation without giving the parties an opportunity to address them...... a party is entitled to know and respond to the case against it, whether by the calling of evidence, or through submissions. This is particularly so when there is a question as to whether a party is en- gaged [in] criminal activity. In my view, the trial in the case at bar became unfair when the trial judge, acting on his own initiative, made a finding that Mr. and Mrs. Renard acted in concert with Mr. Glockl to defraud Canada Trustco. In effect, the Renards were pro- nounced guilty of fraud, albeit on an application of the civil burden of proof, without having an opportunity to respond to allegations against them. 41 For similar reasons, courts have held that it is improper for a judge to take jurisdiction to grant an order that has not been sought by the parties through a properly filed application supported by evidence: Cold Lake First Nations v. Alberta (Minister of Tourism, Parks & Recreation), 2012 ABCA 36, 522 A.R. 159 (Alta. C.A.) at para 35. Likewise, in Jensen v. Ross, 2014 BCCA 173, 373 D.L.R. (4th) 656 (B.C. C.A.) at para 24, the British Columbia Court of Appeal cautioned that absent exceptional cir- cumstances judges should not act on their own motion, as to do so “com- promises their role of impartial arbitrator”. 42 The appellants say that the trial judge fell into these errors at various points in her dealings with the parties and in rendering her judgment both in the trial decision and costs award, and that these errors deprived the appellants of a fair hearing. We agree that there are several instances where the appellants were not given an adequate opportunity to know and meet the case against them, and where the trial judge stepped outside her appropriate role as impartial arbitrator. As such, the appellants were not afforded a procedurally fair trial. Those instances are described below. 44 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

a. The trial judge’s development of an “alternative scenario” for liability and damages 43 The most serious breach of the audi alteram partem rule arises from the theory of liability and damages advanced by the trial judge, on which she based her conclusion that the appellants were liable in negligence and breach of contract for their representation of the respondents. The trial judge termed this an “alternative scenario” of liability and damages, and describes it at paragraphs [498] to [601] of the trial decision. 44 As has been mentioned, the pleadings in the negligence action alleged negligence and breach of contract against the appellants in their conduct of the Inspector Action. The statement of claim included allegations that the appellants were negligent in not getting the matter to trial in a timely manner, they failed to claim for all the damages suffered by the respon- dents, they were negligent in their presentation of the damage claim at trial, that they were unprepared for trial, they entered into negotiations for a reduction in costs and interests to be paid to the respondent without instructions from their clients, and they were negligent in their advice regarding potential appeal of the judgment in the Inspector Action. The appellants’ written submissions on the negligence trial deal primarily with these areas. 45 The pleadings also include a general claim that the appellants were negligent in “failing to properly advise the Plaintiffs”. In their written submissions to the trial judge, the respondents submitted that this inade- quate advice arose in two areas: advising them that they could not re- cover financial losses resulting from their inability to buy investment properties; and advising them that they must mitigate the damages being caused to the house by repairing it at any cost. The allegations are broad and the potential damages arising from the alleged negligent advice are not particularized in the respondents’ submissions. The appellants’ writ- ten submissions, likewise, address the allegations briefly and in broad terms. 46 These allegations of negligent pre-trial advice, rather than the allega- tions of negligent conduct of the trial contained in the pleadings, are the jumping off point for the trial judge’s “alternative scenario” of liability and damages. 47 The trial judge concluded that the appellants were negligent in failing to identify the options available under the law of damages, which she identified as: (i) repair the house and seek damages for the costs of re- pairs (the advice given), or (ii) sell the house for its true value and claim Malton v. Attia The Court 45

the difference between the amount they paid to buy the house and the amount realized on the sale. The trial judge also concluded that the ap- pellants were negligent in failing to retain experts to aid in assessing these options. Those findings then formed the basis for the damages sce- nario developed by the trial judge, which was, as the appellants argued on appeal, based on several assumptions. For instance, the trial judge as- sumed that, had the respondents been given the proper legal advice about their options, they would have rejected the option to repair the house defects and would have sold the house in 2001/2002 rather than repair it. Had this been done, the amount of damages would have crystallized before trial and the only issue would have been liability. 48 The trial judge also found that the appellants negligently advised the respondents as to the law on mitigation, and that they should have ad- vised them to make only those repairs necessary to stop further deteriora- tion. She found the respondents would have spent approximately $6000 on repairs, rather than the over $90,000 actually spent. This would have left them with funds available to invest in rental properties, as was their original plan. She assumed that they would have invested $80,000 in two properties in 2001/2002, each valued at $90,000. By late spring 2002, the house would have been sold, giving the respondents funds to purchase a home to live in, and they would have had two investment properties gen- erating income. She found the appellants liable for the lost investment opportunity as a result of their bad advice about damages and mitigation. She also found that the Inspector Action would have been concluded in a more timely manner and the damages portion would have been less com- plicated if the appellants had acted competently from the outset. 49 The trial judge concluded that the respondents were not able to take advantage of the alternative scenario because of the appellants’ negli- gence. In her reasons, the trial judge noted that the respondents had not testified that they would have proceeded in this fashion. They did not testify that they would have sold the property. However, the trial judge found that based on their finances and their willingness to accept their lawyer’s advice, they would have done so had the option been put to them. 50 The trial judge calculated damages pursuant to her alternative scena- rio, assuming that the two rental investment properties would have in- creased in value by 155% between October 2001 and June 2008, with total damages for the lost gain of $359,000. 46 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

51 This detailed theory of liability and damages was not presented to the parties and, most importantly, was not presented to the appellants so that they could put forward evidence and argument in response to it. On ap- peal, the appellants point out a number of assumptions inherent in the alternative scenario for which no evidence was presented at trial. They include: a. What the respondents would have to pay for the required experts b. The value of the house in its original state c. What loss in value could be attributed to deficiencies for which the Inspector was liable d. Whether the house could have been sold without further repairs e. What expenses would be incurred and revenues could have been earned from the investments the respondents proposed to make f. What the increase would have been in value of the properties of the type the respondents would have purchased for investment purposes g. Whether the house was initially priced at a favourable basis be- cause of the presence of problems h. The market conditions at the time she assumed the house would have been sold 52 The appellants were not given the opportunity to respond to the as- sumptions, findings and conclusions drawn by the trial judge in the alter- native scenario, either by way of rebuttal evidence, cross examination or legal argument. The trial judge’s approach seems to have arisen from her preliminary ruling that expert evidence on the standard of care expected of a competent trial counsel was not necessary. Regardless of whether that conclusion was correct in law, the result in this case was that the trial judge essentially relied on her own view as to how the litigation ought to have been conducted, constructing a theory of liability and damages as she wrote her decision. The result was that she improperly entered into the fray, and awarded damages on a theory not put to the parties. 53 The trial judge’s approach raises fairness concerns, as a breach of the audi alteram partem principle, as well as concerns regarding the reliabil- ity of the theory introduced in the reasons for judgment. This latter prob- lem was addressed by Doherty JA in Rodaro at para 62: We rely on the adversarial process to get at the truth. That process assumes that the truth best emerges after a full and vigorous competi- tion amongst the various opposing parties. A theory of liability that Malton v. Attia The Court 47

emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process. We simply do not know how [the trial judge’s] lost opportunity theory would have held up had it been subject to the rigours of the adversarial process. 54 Similar issues arise here. It was an error for the trial judge to advance her own theory of liability and damages in her reasons for judgment, on a basis not pleaded and not advanced during the trial. That error resulted in a serious breach of the rules of natural justice, sufficient to warrant a new trial.

b. The awards of punitive damages 55 Other breaches of the audi alteram partem rule relate to the trial judge’s decision to award punitive damages against the appellants, for actions that she characterized as misconduct. The statement of claim does not seek punitive damages. In the course of her trial decision, the trial judge, on her own motion, amended the respondents’ pleadings to allow an award for punitive damages on grounds not raised by the re- spondents. She then proceeded to award punitive damages under two heads: (i) that the individual appellant had misled the Law Society in his response to a 2008 complaint filed by the respondents; and (ii) that the appellants disclosed privileged materials belonging to another client in the course of the negligence trial. 56 These damage awards are problematic for two reasons: first, because the trial judge decided on her own motion to amend the statement of claim to permit them to be made, thereby depriving the appellants of an adequate opportunity to respond; and second, because they lacked foun- dation in the evidence or in law. 57 With respect to the Law Society complaint, the trial judge found that the individual appellant had “misled the Law Society” in his response to the respondents’ 2008 complaint, and that his actions were “not acciden- tal but deliberate”. She awarded the respondents $10,000 in punitive damages as a result. The finding appears to have been made on the basis of the appellant’s testimony at trial. In her reasons on the preliminary ruling, the trial judge held that the appellant admitted in testimony that he had “lied” in his communication with the Law Society. As the appel- lants pointed out in their written submissions, this is inaccurate; the ap- pellant acknowledged that his response to the Law Society was incom- plete and contained inaccuracies, but he did not admit to deliberately misleading the Law Society. In the trial decision, the trial judge altered 48 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

her conclusions somewhat to a finding that he had “misled” the Law So- ciety. This was still a serious finding of misconduct. Importantly, the Law Society did not make any such finding against the appellant. The trial judge’s comments to the contrary, in both her preliminary decision and her trial decision, were not warranted. 58 Moreover, the interactions between the appellant and the Law Society were not relevant to the negligence action. The Law Society did not find the appellant’s conduct deserving of sanction, and this alleged, unproven misconduct should not have formed the basis for an award of punitive damages. 59 The trial judge also awarded punitive damages for actions by the indi- vidual appellant during the negligence trial that she found to be a breach of solicitor client privilege. For this breach, which did not involve the respondents but other, unrelated clients of the appellants, she ordered the appellants to pay $25,000 to the Legal Aid Society of Alberta (not a party to the action). 60 As mentioned previously, the finding of a breach arose from the ap- pellant’s disclosure of handwritten notes he had made during the trial of the Inspector Action. He found these notes towards the end of the negli- gence trial and disclosed them for the first time while he was giving evi- dence. The reverse side of two trial note pages contained information from another, unrelated client file. The appellant disclosed these notes to the respondents, and copies of them were entered as an exhibit at trial. 61 The trial judge found that the disclosure was a breach of the other client’s solicitor-client privilege. She went on to find that the appellant “knew what he was doing was wrong”, notwithstanding apparently in- consistent earlier findings that his actions were “careless” and “thought- less”. The appellants’ disclosure of client information was certainly care- less, but there was no basis on which one could conclude that the breach was deliberate or anything other than inadvertent. 62 Punitive damages are available only for deliberate wrongful acts which are so “harsh, vindictive, reprehensible and malicious” that they deserve punishment: Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085 (S.C.C.) at para 27, (1989), 58 D.L.R. (4th) 193 (S.C.C.). In this instance, the breach of client confidence was careless, but not deliberate. In addition, the conduct for which punitive damages are awarded must be an actionable wrong against the plaintiff: Whiten v. Pilot Insurance Co., 2002 SCC 18 (S.C.C.) at para 82, [2002] 1 S.C.R. 595 (S.C.C.). If the appellants’ breach of solicitor-client privilege was an Malton v. Attia The Court 49

actionable wrong, it was against the other clients, not the respondents. It is unprecedented to award punitive damages in an action to a person or group that is not a party to that action. 63 Moreover, both of the findings that led to the awards of punitive dam- ages are serious findings of misconduct. Before such findings are made, it is incumbent on a trial judge to ensure the party affected has adequate notice of the possibility of the finding, and an adequate opportunity to respond to the allegations. This did not happen here. Even with respect to the finding about the Law Society complaint, which had been the subject of comment in the preliminary decision, there was inadequate notice that a further finding leading to a punitive damage award might be made. Similarly, there was an inadequate opportunity to respond to the possibil- ity of a second award of punitive damages payable to a third party, which was highly unusual. These awards constitute further breaches of procedu- ral fairness.

c. The findings of litigation misconduct in the costs award 64 As was mentioned previously, in her costs decision the trial judge identified several instances of litigation misconduct that, she concluded, justified an award of increased costs. The findings of misconduct were aimed at both the appellants and their counsel at the negligence trial. Having reviewed the record and the trial judge’s reasons for her findings, we conclude that these findings cannot stand for two reasons. 65 First, the findings of litigation misconduct give rise to similar proce- dural fairness concerns as the other findings already discussed. Although some of the trial judge’s concerns had been raised during her dealings with counsel or in her written decisions on the preliminary ruling and the trial decision, there is little indication that the appellants were alerted to the possibility that those concerns could lead to the degree of criticism that followed, or to an award for increased costs. The transcript of the costs hearing reflects a discussion about the costs the respondents, as self-represented litigants, would be entitled to receive, and discussion of allowable disbursements. The possibility of increased costs because of litigation misconduct was not raised at that time. The appellants had an inadequate opportunity to respond to the misconduct findings that were eventually made against them. 66 Second, there are errors in principle in the making of the costs award that warrant appellate intervention. The trial judge reviewed the law on the type of misconduct that merits an elevated costs award: for example, 50 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

where a party attempts to “deceive the court and defeat justice” (Olson v. New Home Certification Program of Alberta (1986), 69 A.R. 356, 44 Alta. L.R. (2d) 207 (Alta. Q.B.)); where the defendants were guilty of positive misconduct that was “contemptuous” of the aggrieved party in forcing that party to exhaust legal proceedings to obtain that which was obviously his (Max Sonnenberg Inc. v. Stewart, Smith (Canada) Ltd. (1986), 48 Alta. L.R. (2d) 367, [1987] 2 W.W.R. 75 (Alta. Q.B.)); where the positive misconduct “is blatant and calculated to deliberately harm the other party” (Jackson v. Trimac Industries Ltd. (1993), 138 A.R. 161 (Alta. Q.B.) at para 32; aff’d on costs, (1994), 155 A.R. 42 (Alta. C.A.)). 67 The question before us is whether there was a sufficient basis on which the impugned actions of the appellants and their counsel could be characterized as the kind of positive, deliberate misconduct described in the cases relied upon by the trial judge — misconduct intended to deceive the court, defeat justice, hinder the proceeding, or harm the re- spondents. If the findings in the costs award were based on a palpable error with respect to the facts, or were without foundation in the law or the evidence, this is an error in principle and that part of the costs award must be overturned. 68 The findings of litigation misconduct that are challenged by the ap- pellants on this basis are reviewed below.

“Splitting the Trial” 69 Many of the difficulties in this case appear to date from the decision by the appellants’ counsel to request and then appeal the trial judge’s preliminary ruling regarding the need for expert evidence on the standard of care. The trial judge’s strong initial reaction upon learning of the ap- pellants’ appeal is apparent from the following exchange: The Court: [I]f I had known you were going to pull this, I would not have given it to you early. Frankly, I assumed that maybe whatever the decision was, that you would then be prepared to settle it, but clearly not. ... I would never in a million years have done a preliminary thing if I thought for a second that you would use this ploy, and I consider it to be a ploy. Mr. Cox: My Lady, I take great difference — The Court: Well, you may. Mr. Cox: — with — with your terminology of ploy and this being a play. I hadn’t anticipated any kind of appeal. Obviously I Malton v. Attia The Court 51

didn’t know what your judgment would be. (Transcript p 1834, line 41; p 1835, lines 1-15). ... Mr. Cox: And, My Lady, I certainly had no intention of pulling the wool over the Court’s eyes, which is the characterization I’m getting from your comments. The Court: That is precisely the way I feel — Mr. Cox: Fine. The Court: — that the wool has been pulled over my eyes. Mr. Cox, that is why I used the word ploy because that is what I think it has turned into. I really did not expect that this would happen without a discussion with me first (Transcript p 1837, lines 22-32). ... The Court: So — and I am — I will be honest with you. I am con- sidering writing to the Court of Appeal and expressing my dismay that you have gone ahead and appealed this without a discussion, without any indication when you asked me to de- cide the preliminary point because the only thing I could think of was that you wanted to know whether or not you were in for a penny or whether you were in for a pound in terms of a settlement. Clearly that was not in your mind, but I think it was up to you, Mr. Cox, to say to the Court, this is what we are thinking: In the event you find against us, rather than going to all the work of preparing argument on the bal- ance of this, we would appeal it, so that I knew what was happening because I would have put a stop to it right then (Transcript p 1840, lines 17-25). 70 The trial judge’s conclusion that the appellants’ counsel had used his request for the preliminary ruling as a “ploy” to delay the trial, seems to have been premised on an assumption that the appellants would settle the action if the preliminary ruling went against them. That assumption was incorrect, and there is nothing on the record to suggest that counsel had made any such representation, certainly not intentionally. 71 In the costs decision, issued almost two years later, the trial judge elaborated on her conclusion that the appellants’ attempt to “split the trial” and conduct “litigation by instalments” was an intentional abuse of the court’s process and comprised serious litigation misconduct that jus- tified an award of increased costs. At various points in the costs decision, the trial judge referred to the appellants’ application and proposed appeal 52 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

of the preliminary ruling as “a serious abuse of court process” (at para 80); “procedurally illegal” (at para 98); “inappropriate” and “without valid reason” (at para 111); “predatory behaviour” that “served to intimi- date and discourage the [respondents]” (at para 107); and “misleading the Court” (at para 156). 72 We see no basis on the record to attribute any improper motives to the appellants or counsel with respect to their application. While the timing of the application might be characterized as unusual, at no point did the appellants suggest to the trial judge that they would settle the matter if the preliminary ruling was unfavourable to them. The appellants did nothing to mislead the trial judge into drawing this assumption. 73 Moreover, the trial judge was not obliged to accede to the motion. That process was entirely within her control. 74 There was no basis for the harsh criticism on this issue directed to- ward the appellants and their counsel, nor was there any basis for using this conduct as a factor in awarding higher costs and a further $20,000 award for punitive costs.

Intentional Failure to Disclose Documents 75 This finding of misconduct relates to the late disclosure of the indivi- dual appellant’s handwritten notes from the trial of the Inspector Action. These are the same notes that led to the finding of a breach of solicitor- client privilege, already discussed. The appellant found the notes on Thursday, April 26, 2013 (in the midst of his testimony at the negligence trial) in his file on the respondents’ Law Society complaint. He did not notify his counsel or the respondents until the following Monday, April 29. The trial judge concluded there was no excuse for not discovering these documents earlier, and there was no excuse for waiting four days to disclose them. She said, at para 46: This is very serious litigation misconduct. Attia cannot claim inno- cence, naivet´e, or a misunderstanding of his obligation. He, as a law- yer, let alone a litigator, was perfectly aware of his obligation to full disclosure. 76 The trial judge also imputed a malicious motive to the appellant’s failure to disclose because of a comment in his April 29 testimony to the effect that a lot of his notes on the file “have gone missing”. Shortly after that testimony, the appellant disclosed the existence of the trial notes. The trial judge concluded that it was “difficult to construct” an innocent explanation for this testimony. With respect, it is not clear to us that an Malton v. Attia The Court 53

inference of malicious intent can be drawn from the testimony. The ap- pellant did not say that all of his trial notes had been found, some of them may have been missing still; indeed, the particular conversation being discussed in the impugned testimony does not appear in the trial notes that were found. There may well have been other notes to file, still miss- ing, that referenced that conversation. 77 The appellant provided a reason for why he did not disclose the trial notes earlier; the documents had been placed in the Law Society file and not re-filed for the negligence action. This is more an example of poor file management than a deliberate attempt to evade disclosure obliga- tions. Moreover, the notes that were eventually disclosed had no impact on the trial. They should have been disclosed earlier, but in our view there is no basis on which to classify this incident as “serious litigation misconduct”.

Inadequate Legal Research 78 The trial judge was dissatisfied with the appellants’ legal research in three areas. One of those related to the failure to identify binding Alberta appellate authority, which the trial judge located after writing her prelim- inary ruling. Whether the other problems identified by the trial judge were actually examples of substandard legal research would be, we sug- gest, open for debate. In any event, none of them fell short of the ethical standard to not “deliberately refrain from informing a tribunal of any rel- evant adverse authority that the lawyer considers to be directly on point and that has not been mentioned by another party”, as the trial judge found (citing the Law Society of Alberta Code of Conduct, s 4.01(2). There is no basis for concluding that any failure to provide additional case law was deliberate, and therefore unethical.

2. Did the conduct of the trial and the content of the written decisions give rise to a reasonable apprehension of bias? 79 As is apparent from the preceding discussion, the written decisions contain numerous comments and findings that are critical of the appel- lants and their counsel. The appellants submit that, when considered cu- mulatively, these criticisms and the conduct of the trial judge give rise to a reasonable apprehension that the trial judge’s decisions were unfairly influenced by animus toward the appellants and their counsel. 80 Judicial impartiality is of central importance to our system of justice. It is a fundamental principle that those who adjudicate must always do so 54 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

without bias or prejudice, and must be perceived to do so. In Weywakum at para 58, the Supreme Court of Canada adopted the following defini- tion of bias from R. v. Bertram, [1989] O.J. No. 2123 (Ont. H.C.): ... a leaning, inclination, bent or predisposition towards one side or another or a particular result. In its application to legal proceedings, it represents a predisposition to decide an issue or cause in a certain way which does not leave the judicial mind perfectly open to convic- tion. Bias is a condition or state of mind which sways judgment and renders a judicial officer unable to exercise his or her functions im- partially in a particular case. 81 A judge must not only be free of actual bias, but must be seen as being free from bias. The oft-cited description of the standard to be met, a reasonable apprehension of bais, is that of Grandpr´e J in Committee for Justice & Liberty v. Canada (National Energy Board) (1976), [1978] 1 S.C.R. 369 (S.C.C.) at p 394: ... the apprehension of bias must be a reasonable one, held by reason- able and right minded persons, applying themselves to the question and obtaining thereon the required information. In the words of the Court of Appeal, that test is “what would an informed person, view- ing the matter realistically and practically — and having thought the matter through — conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or uncon- sciously, would not decide fairly. 82 There is a presumption of judicial impartiality, which must be dis- placed by the appellants. The threshold is a high one, and properly so. Instances of impatience, rudeness or criticism do not rise to the standard of a reasonable apprehension of bias if they do not indicate a predisposi- tion to decide a case or issue in a certain way. However, a reasonable apprehension of bias may be found where it seems a judge has prema- turely made up his mind, foreclosed argument and given judgment with- out providing opportunity for a party to be heard: see Dool v. Nazarewycz, 2009 ABCA 70, [2009] 7 W.W.R. 636 (Alta. C.A.) at paras 67-71. The reviewing court must consider the record in its entirety to determine if the impugned conduct cumulatively creates a reasonable ap- prehension of bias: Miglin v. Miglin, 2003 SCC 24 (S.C.C.) at para 26, [2003] 1 S.C.R. 303 (S.C.C.). 83 In this case, the numerous unjustified criticisms of and adverse find- ings against the appellants and their counsel, already discussed in these reasons, raise a concern that the trial judge was predisposed against the appellants. Taken individually, the various adverse findings and criti- Malton v. Attia The Court 55

cisms would not be able to withstand appellate review, but they would not necessarily lead to a reasonable apprehension of bias. Taken cumula- tively, they point to an animus against the appellants and their counsel that is troubling. The sustained reaction of the trial judge to the appel- lants’ decision to apply for and then appeal the preliminary ruling is il- lustrative of this issue; this was not a case of a trial judge being momen- tarily frustrated with counsel’s conduct. The problem continued with the awards for punitive damages and the findings of litigation misconduct leading to increased costs. 84 Other examples are apparent in various written decisions. A few ex- amples will suffice to further illustrate the problem: • discussing the events of the Inspector Action, prior to any allega- tions of solicitor negligence: “I note that in the covering fax on September 15, 2006, Ms. Malton says: ‘We also think you are an excellent lawyer.’ Little did she know.” (Trial Decision at para 432) • after noting that the appellant had failed to prove damages during the actual trial: “Following their written submissions on liability issues, there were correspondence and telephone calls between counsel concerning damages at trial. Attia wanted to make sub- missions concerning damages. Perhaps Attia now understood that he had not proved damages?” (Trial Decision at para 438) • after suggesting that the Preliminary Decision would not have been necessary if the appellant’s counsel had properly researched the law: “Attia’s counsel apparently needed the law explained to them.” (Costs Decision at para 74) • stating that Mr. Attia’s defence had “made things worse for him than they were at the end of the Plaintiffs’ case.” (Costs Decision at para 90) • giving her reasons for agreeing to split the trial: “I acquiesced in part because at that point I saw Mr. Attia’s case as a sinking ship... I made the erroneous assumption that given the sad state of Attia’s case at the end of the trial, he would instruct his counsel to settle the matter in the event they were not successful on the preliminary issue...” (Costs Decision at para 90) • referring to the appellant’s position on the preliminary issue as “a ‘Hail Mary’ defence application.” (Costs Decision at para 95) 56 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

85 In its totality, a picture emerges of a challenging trial that ultimately became procedurally unfair. Trial judges must have latitude to deal with misconduct by litigants and counsel. Trial judges must have tools to con- trol the process. But the discretion afforded to them must be exercised judicially on evidence bearing in mind the principles of fundamental justice.

Conclusion 86 The appellants’ trial was procedurally unfair. There are several im- portant assumptions and conclusions drawn by the trial judge that were not based on the pleadings, nor on the evidence and arguments presented by the parties, and to which the appellants were not given an adequate or any opportunity to respond. These assumptions and conclusions were central to the finding of liability and the assessment of damages against the appellants. 87 Moreover, some of the conclusions amounted to serious findings of misconduct by the appellants and serious criticism of their counsel, many of which were unduly harsh and unwarranted. Those findings of miscon- duct were not supported by the evidence and cannot stand. 88 The appeal is allowed, the trial decision and costs award are set aside, and the matter is returned for a new trial. Appeal allowed. Kohan v. Kohan 57

[Indexed as: Kohan v. Kohan] Carrie Louise Kohan, Respondent (Plaintiff) and Miles Nelson Scott Kohan, Appellant (Defendant) Alberta Court of Appeal Docket: Calgary Appeal 1501-0243-AC 2016 ABCA 125 Peter Martin, Frans Slatter, Barbara Lea Veldhuis JJ.A. Heard: March 8, 2016 Judgment: April 27, 2016 Family law –––– Support — Child support under federal and provincial guidelines — Variation or termination of award — Change in circum- stances — Change in status as child of marriage –––– Parties married in 1994, had two children, separated in 2004 and divorced in 2008 — Shortly after sepa- ration, husband obtained MBA and became very successful in new home busi- ness, earning bonuses far in excess of his salary — Wife embarked on various ventures relating primarily to theatre and her income dropped significantly dur- ing period of separation — At trial in 2015, trial judge ordered husband to pay child support since separation, resulting in arrears of $425,758 — Trial judge held that eldest child remained child of marriage even though she was over 18 and ordered ongoing support of $9,980.65 — Judge held that wife acted reason- ably in career choices but attributed $40,000 of income for three years because of funds she received from her new partner — Husband appealed finding that eldest child remained child of marriage and failure to attribute income to wife — Appeal allowed — Adult child can remain “child of the marriage” when “una- ble” to withdraw from parents’ charge, signifying something more than mere lifestyle choice to remain dependent — Evidence established only that eldest child was still pursuing high school education and had ambitions of singing ca- reer — There was no evidence to explain why she had not yet finished high school or when she might do so — While child was entitled to career and lifes- tyle choice, she was not entitled to have it funded by her parents — Record could not support finding that eldest child remained child of marriage. Family law –––– Support — Spousal support under Divorce Act and provin- cial statutes — Lump sum award — Factors to be considered — Miscella- neous –––– Parties married in 1994, had two children, separated in 2004 and di- vorced in 2008 — Shortly after separation, husband obtained MBA and became very successful in new home business, earning bonuses far in excess of his sal- ary — Wife embarked on various ventures relating primarily to theatre and her income dropped significantly during period of separation — At trial in 2015, 58 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

trial judge held that wife acted reasonably in career choices but attributed $40,000 of income for three years because of funds she received from her new partner — Judge awarded lump sum spousal support of $500,000 — Husband appealed, arguing there were insufficient reasons to support lump sum spousal award and trial judge gave insufficient weight to self-sufficiency — He claimed trial judge erred in utilizing husband’s post-separation increases in income re- sulting from bonuses in calculating spousal support — Appeal allowed — Cir- cumstances of parties changed significantly during long period of separation prior to trial — Husband’s uncontradicted evidence was that significant bonuses arose from unprecedented market conditions — Reasons did not support connec- tion between bonuses and contributions of wife — While post-separation in- creases in income could be part of condition, means, needs and other circum- stances of each spouse, there must be some connection between payee spouse’s contribution and increase, particularly with one time bonuses based on anoma- lous business conditions — Finding that wife contributed in general sense to husband’s “skill set” entitled to deference but bonuses did not arise from that skill set — Wife made no meaningful contribution to husband’s MBA and bo- nuses arose largely from unusual market conditions, unconnected with any con- tribution of wife to marriage — Wife did not meet burden of demonstrating full entitlement to share of bonuses — Trial judge’s lump sum spousal award was set “at large”, without identifying quantum of neither periodic support nor in- come levels supporting underlying analysis — Source of lump sum payment was completely unexplained on record — Broad entitlement to spousal support was established but husband’s income should be capped at $350,000 in any year — Quantum of spousal support was referred back to trial court. Family law –––– Costs — In family law proceedings generally — Factors considered — Success — Miscellaneous –––– Parties married in 1994, had two children, separated in 2004 and divorced in 2008 — At trial in 2015, trial judge ordered the husband to pay child support since separation, resulting in arrears of $425,758 — Trial judge held that eldest child remained child of marriage even though she was over 18 and ordered ongoing support — Judge held that wife acted reasonably in career choices and awarded lump sum spousal support of $500,000 — Trial judge awarded wife costs assessed on two times column 4 of Schedule C and 10 per cent premium on fee component after date of wife’s offer with respect to child support — Husband appealed costs award — Appeal al- lowed — Eldest child was found to not be child of marriage, and quantum of spousal support was referred back to trial court — Justification for 10 per cent premium on costs was not warranted since child support award was reversed — Wife’s success at trial was significantly reduced — Good deal of complexity at trial arose from unsatisfactory state of wife’s financial records — Considerable amount of pre-trial effort was directed towards parenting issues because wife insisted on sole custody but issue ultimately became moot at trial because of Kohan v. Kohan 59 children’s age — Wife was awarded costs of trial assessed on column 4 with no premium, and husband was entitled to costs of appeal on same scale. Cases considered: Assn. des Parents ayants droit de Yellowknife c. Territoires du Nord-Ouest (Procureur g´en´eral) (2015), 2015 NWTCA 2, 2015 CATNO 2, 2015 Car- swellNWT 1, 2015 CarswellNWT 2, [2015] N.W.T.J. No. 5, [2015] 3 W.W.R. 490, 80 Admin. L.R. (5th) 75, [2015] N.W.T.J. No. 4, (sub nom. Northwest Territories (Attorney General) v. Assn. des parents ayants droit de Yellowknife) 326 C.R.R. (2d) 139, (sub nom. Association des parents ayants droit de Yellowknife v. Northwest Territories (Attorney General)) 593 A.R. 180, (sub nom. Association des parents ayants droit de Yellowknife v. Northwest Territories (Attorney General)) 637 W.A.C. 180 (N.W.T. C.A.) — referred to Corbeil v. Corbeil (2001), 2001 ABCA 220, 2001 CarswellAlta 1138, 286 A.R. 330, 253 W.A.C. 330, 21 R.F.L. (5th) 1, [2002] 3 W.W.R. 60, [2001] A.J. No. 1144, 98 Alta. L.R. (3d) 38 (Alta. C.A.) — referred to Hickey v. Hickey (1999), [1999] S.C.J. No. 9, 1999 CarswellMan 254, 1999 Car- swellMan 255, 172 D.L.R. (4th) 577, 240 N.R. 312, 46 R.F.L. (4th) 1, [1999] 8 W.W.R. 485, 138 Man. R. (2d) 40, 202 W.A.C. 40, [1999] 2 S.C.R. 518 (S.C.C.) — referred to Housen v. Nikolaisen (2002), 2002 SCC 33, 2002 CarswellSask 178, 2002 Car- swellSask 179, [2002] S.C.J. No. 31, 286 N.R. 1, 10 C.C.L.T. (3d) 157, 211 D.L.R. (4th) 577, [2002] 7 W.W.R. 1, 219 Sask. R. 1, 272 W.A.C. 1, 30 M.P.L.R. (3d) 1, [2002] 2 S.C.R. 235, REJB 2002-29758, 2002 CSC 33 (S.C.C.) — followed L. (H.) v. Canada (Attorney General) (2005), 2005 SCC 25, 2005 CarswellSask 268, 2005 CarswellSask 273, [2005] S.C.J. No. 24, 24 Admin. L.R. (4th) 1, 8 C.P.C. (6th) 199, 251 D.L.R. (4th) 604, 333 N.R. 1, [2005] 8 W.W.R. 1, 262 Sask. R. 1, 347 W.A.C. 1, EYB 2005-89538, [2005] 1 S.C.R. 401, 29 C.C.L.T. (3d) 1, REJB 2005-89538, 2005 CSC 25 (S.C.C.) — referred to Lauderdale v. Lauderdale (1997), 1997 CarswellAlta 448, 29 R.F.L. (4th) 34, 200 A.R. 198, 146 W.A.C. 198, [1997] A.J. No. 499 (Alta. C.A.) — referred to Moge v. Moge (1992), [1993] 1 W.W.R. 481, 99 D.L.R. (4th) 456, [1992] 3 S.C.R. 813, 81 Man. R. (2d) 161, 30 W.A.C. 161, 43 R.F.L. (3d) 345, 145 N.R. 1, [1993] R.D.F. 168, [1992] S.C.J. No. 107, 1992 CarswellMan 143, 1992 CarswellMan 222, EYB 1992-67141 (S.C.C.) — considered Moore v. Moore (1988), 23 B.C.L.R. (2d) 350, 1988 CarswellBC 68 (B.C. S.C.) — referred to Olson v. Olson (2003), 2003 ABCA 56, 2003 CarswellAlta 254, 320 A.R. 379, 288 W.A.C. 379, 36 R.F.L. (5th) 196, [2003] 7 W.W.R. 12, [2003] A.J. No. 230, 225 D.L.R. (4th) 735, 14 Alta. L.R. (4th) 104, 2003 A.J. No. 230 (Alta. C.A.) — referred to 60 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Ouwerkerk v. Ouwerkerk (2007), 2007 ABQB 156, 2007 CarswellAlta 313, 415 A.R. 358 (Alta. Q.B.) — referred to S. (D.B.) v. G. (S.R.) (2006), 2006 SCC 37, 2006 CarswellAlta 976, 2006 CarswellAlta 977, [2006] S.C.J. No. 37, 61 Alta. L.R. (4th) 1, 351 N.R. 201, [2006] 10 W.W.R. 379, 270 D.L.R. (4th) 297, 31 R.F.L. (6th) 1, 391 A.R. 297, 377 W.A.C. 297, [2006] 2 S.C.R. 231, [2005] S.C.C.A. No. 100 (S.C.C.) — followed Spencer v. Canada (Attorney General) (2000), 2000 SKCA 96, 2000 Carswell- Sask 848, 199 Sask. R. 127, 232 W.A.C. 127, [2001] 7 W.W.R. 476, 7 C.P.C. (5th) 280, [2000] S.J. No. 514 (Sask. C.A.) — referred to Thompson v. Thompson (2013), 2013 ONSC 5500, 2013 CarswellOnt 12392, [2013] O.J. No. 4001 (Ont. S.C.J.) — followed Tran v. Kerr (2014), 2014 ABCA 350, 2014 CarswellAlta 1960, [2014] A.J. No. 1189, [2015] 1 W.W.R. 70, 584 A.R. 306, 623 W.A.C. 306, 6 Alta. L.R. (6th) 213 (Alta. C.A.) — referred to Traverse v. Turnbull (1996), 47 C.P.C. (3d) 205, 151 N.S.R. (2d) 302, 440 A.P.R. 302, 1996 CarswellNS 242, [1996] N.S.J. No. 212, 1996 NSCA 124 (N.S. C.A.) — referred to Van Der Ploeg v. Quick (1983), 27 Alta. L.R. (2d) 221, 1983 CarswellAlta 138 (Alta. Master) — referred to Statutes considered: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) Generally — referred to s. 2(1) “child of the marriage” — considered s. 15.2(1) [en. 1997, c. 1, s. 2] — considered s. 15.2(6) [en. 1997, c. 1, s. 2] — considered Rules considered: Alberta Rules of Court, Alta. Reg. 124/2010 Generally — referred to R. 5.6 — considered Tariffs considered: Alberta Rules of Court, Alta. Reg. 124/2010 Sched. C, Tariff of Costs, column 4 — referred to Regulations considered: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) Federal Child Support Guidelines, SOR/97-175 Generally — referred to

APPEAL by husband from finding that eldest child remained child of marriage, lump sum spousal support award, and costs of trial. Kohan v. Kohan The Court 61

C.J. Popowich, C. Harris, for Respondent A.D. Martens, J. Griffith, for Appellant

The Court:

1 The appellant appeals a judgment granting child support and spousal support, following a seven-day trial.

Facts 2 The parties commenced cohabiting in 1993, and were married in 1994. There were two children of the marriage, born in 1996 and 2000. The parties separated in 2004, and were divorced in 2008; the trial to determine child and spousal support was not held until June 2015. 3 At the time of the marriage, neither of the parties had any post-secon- dary education, but they were very entrepreneurial, hard-working and motivated. They embarked on a number of ventures, not all of which were successful. The appellant assigned himself into bankruptcy in about 1999, and the respondent did likewise in 2003. As a result, there was very little matrimonial property to divide. 4 In 2001 the appellant became involved in the new home industry, and he thrived. He has remained in that industry, and over the years he has changed employers and has been promoted into the management ranks. The respondent originally worked in the theatre business, but she also became involved in the new home business in 2004, and also did well. 5 Between 1999 and 2003 the respondent stayed home with the chil- dren. Following the separation there was generally a split custody re- gime, with one of the children living with each parent. The respondent pressed a claim for sole custody, which was not resolved before the chil- dren were in their late teens and the matter became academic. 6 The appellant re-married in 2008, shortly after the divorce. The re- spondent was in another relationship between about 2007 and 2011. 7 Shortly after the separation the appellant decided that he should im- prove his education, and he enrolled in a part-time MBA program. Both parties continued to be involved in the new home business. In the year immediately after the separation, the respondent made more money than the appellant. The respondent’s application for ongoing interim child and spousal support was dismissed in October 2006. No further application for interim support was brought until very late in the proceedings, al- though the respondent did from time to time request or demand support. 62 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

The appellant started paying some support in 2008 after the litigation was placed under case management, with the amounts increasing from time to time. 8 As noted, the appellant remained in the new home business through- out, and was very successful. As a result of unusual market conditions, he received extraordinarily large bonuses in 2008, 2011 and 2013 which dwarfed his regular salary. The respondent did not remain in the new home business, but embarked on a number of ventures relating primarily to the theatre business. These were less remunerative to her, and her in- come dropped significantly during the period of separation. 9 The litigation finally went to trial in June 2015. The trial judge found that the respondent was prone to exaggeration, and that she was “not a careful bookkeeper”, but he concluded that the respondent was not inten- tionally misleading the court, and had disclosed as much about her fi- nances as she could. The trial judge decided that the respondent’s claim for arrears of support was not limited to three years, under the presump- tion in S. (D.B.) v. G. (S.R.), 2006 SCC 37 (S.C.C.) at para. 123, [2006] 2 S.C.R. 231 (S.C.C.). The appellant was required to pay child support since separation under the Guidelines, but child support in any month was to be capped at $10,000; this resulted in arrears at trial of $425,758. The trial judge concluded that the eldest child, Nakita, remained a child of the marriage even though she was over 18; ongoing support of $9,980.65 per month was payable. The trial judge concluded that the re- spondent had not been wilfully under-employed, and that she had acted reasonably in her career choices. He did attribute $40,000 of income per year to her for 2009, 2010, and 2011 because of funds she received from her new partner in those years. He concluded that the respondent was entitled to spousal support until February 2014, and awarded a lump sum of $500,000. The appellant appeals some of these findings.

Issues and Standard of Review 10 The appellant has six grounds of appeal arising with respect to the following issues: (a) the finding that Nakita remained a child of the marriage after she turned 18; (b) an insufficiency of reasons supporting the lump sum spousal award of $500,000; (c) a failure to give sufficient weight to the objective of self-suffi- ciency when calculating spousal support; Kohan v. Kohan The Court 63

(d) a failure to attribute income to the respondent; (e) utilizing the appellant’s post-separation increases in income re- sulting from his bonuses in calculating spousal support; (f) the quantum of costs awarded. 11 The standards of review are summarized in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.): (a) conclusions on issues of law are reviewed for correctness: Housen at para. 8, (b) findings of fact, including inferences drawn from the facts are re- viewed for palpable and overriding error: Housen at paras. 10, 23; L. (H.) v. Canada (Attorney General), 2005 SCC 25 (S.C.C.) at para. 74, [2005] 1 S.C.R. 401 (S.C.C.), and (c) findings on questions of mixed fact and law call for a “higher standard” of review, because “matters of mixed law and fact fall along a spectrum of particularity”: Housen para. 36. A deferential standard is appropriate where the decision results more from a consideration of the evidence as a whole, but a correctness stan- dard can be applied when the error arises from the statement of the legal test: Housen at paras. 33, 36. While deference is extended to findings of fact, deference requires that findings be made and clearly stated: Tran v. Kerr, 2014 ABCA 350 (Alta. C.A.) at para. 13, (2014), 584 A.R. 306 (Alta. C.A.); Assn. des Parents ayants droit de Yellowknife c. Territoires du Nord-Ouest (Procureur g´en´eral), 2015 NWTCA 2 (N.W.T. C.A.) at paras. 13, 32, 113, [2015] 3 W.W.R. 490 (N.W.T. C.A.). If the reasons do not extract findings from the evidence appellate review may be warranted. 12 The standard of review of support orders is accordingly deferential, because to a large extent they raise mixed questions of fact and law. A support order should only be disturbed if it reflects an error in principle, a significant misapprehension of the evidence, or if the award is clearly wrong: Hickey v. Hickey, [1999] 2 S.C.R. 518 (S.C.C.) at paras. 11-12; S. (D.B.) v. G. (S.R.) at para. 136; Moge v. Moge, [1992] 3 S.C.R. 813 (S.C.C.) at pp. 832-833.

Adult Children of the Marriage 13 The respondent successfully argued at trial that the eldest child, Nakita, remains a “child of the marriage”, even though she was 19 years of age at trial. 64 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

14 The Divorce Act, RSC 1985, c. 3 (2nd Supp.), stipulates when an adult child can remain a “child of the marriage”: 2(1) “child of the marriage” means a child of two spouses or former spouses who, at the material time, (a) is under the age of majority and who has not withdrawn from their charge, or (b) is the age of majority or over and under their charge but una- ble, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life. This definition specifies that the adult child must be “unable” to with- draw from the parents’ charge; that wording signifies something more than a mere lifestyle choice to remain dependent. The case law estab- lishes that an adult child who is continuing with his or her education can remain a child of the marriage. Education is recognized as an “other cause” within the definition. 15 There was very little evidence on the record about the eldest child, and why she was “unable to withdraw” from her parents’ charge. The trial judge found: [49] Both Mom and Dad believe that Nakita is very talented and she has ambitions of having a singing career. She is still pursuing her high school and has been enrolled online with a home school organi- zation. Based on the evidence I have heard and the documents I have reviewed, in my view, she is making steady progress and I am satis- fied that she has been unable, because of her continuing education and her lack of ability to make a sufficient income from singing, to obtain the necessaries of life. However, I do agree with Dad that he is entitled to all reasonable information relating to her education and her progress. Accordingly, until she is not diligently pursuing her high school education, she is a child of the marriage. However, this direction is reviewable should things change. These reasons tie her inability to withdraw from her parents’ care both to her continuing education, and to her inability to make sufficient income from her singing career. There is no discussion of an “other cause”, nor of whether she was “unable” to withdraw from her parents’ care. There are no findings of fact explaining how she came to be 19 years of age but without a high school education. There was no consideration of the fac- tors normally used to determine if an adult child is a “child of the mar- Kohan v. Kohan The Court 65

riage”: Olson v. Olson, 2003 ABCA 56 (Alta. C.A.) at para. 19, (2003), 320 A.R. 379 (Alta. C.A.). 16 The record discloses that Nakita has been home schooled since the age of 15. She competed in and won the Miss Teen Canada competition at about that time, but otherwise there is no explanation for her failure to complete her schooling. Since she was home schooled, one would as- sume that the individualized program would have enabled her to com- plete her schooling on the usual schedule. 17 There was no evidence on the record to justify the conclusion that Nakita was “making steady progress”. There was documentation show- ing that she was registered with a homeschooling organization, but no evidence indicating how many courses she was taking, and when she might expect to receive her grade 12 diploma. There was no evidence explaining why it was that at the age of 19 she had obtained only 48 of the necessary 100 credits. This cannot be described as “steady progress”. The respondent argued that there were some credits which did not show up on the records, but the respondent had ample time to locate those records before trial. 18 There is a strong expectation that most teenagers will graduate from high school by the time they are 18 or 19. Obviously, not every student can meet that timeline, but deviations from it call for some explanation. An adult child cannot claim indefinite dependency by completing high school one course at a time, and thus remain a child of the marriage into middle-age. An adult child who has resolved to complete her high school, and looks to her parents to fund that education, is expected to focus diligently on that objective, and pursue it full-time in a structured environment. 19 The record discloses that Nakita is finishing her high school by corre- spondence while she “pursues her singing career”. This is a career and lifestyle choice that she has made. She is entitled to pursue her singing career, and should be encouraged in that regard, but she is not entitled to have it funded by her parents: Ouwerkerk v. Ouwerkerk, 2007 ABQB 156 (Alta. Q.B.) at paras. 19-21, (2007), 415 A.R. 358 (Alta. Q.B.); Olson v. Olson at paras. 29-38. There was no evidence on this record as to when, if ever, Nakita might be able to support herself in the music business. From what one can tell from this record, she may well be taking correspondence courses one at a time; there is no explanation on this record why she cannot also be working full time if that is her total course load. Finishing her high school does not appear to be the real rea- 66 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

son why she cannot “withdraw from her parents’ support”. If she is still a child of the marriage, it is not because she is pursuing her education; the reason she has not withdrawn from the care of her parents is because of her career aspirations. 20 The burden of proving that Nakita remained a child of the marriage was on the respondent, and the record cannot support that finding of fact. The respondent notes that both parties agreed that Nakita need not be called to testify at the trial, and that neither would attempt to draw an adverse inference from her absence. That, however, did not displace the obligation of the respondent to prove her case. If nothing else, there was a good bit of documentary evidence about Nakita’s present and intended educational plan that was simply missing from this record. 21 The respondent justifies the failure to meet the burden of proof by noting that she answered 99 undertakings after Questioning and “pro- vided 45 releases”. Neither of these has any effect on the burden of proof. 22 Rule 5.6 requires each party to produce all “relevant and material” documents under his or her control. Providing a “release” to allow the other party to obtain a record does not satisfy this obligation; the party that controls the document must obtain and produce it: Spencer v. Canada (Attorney General), 2000 SKCA 96 (Sask. C.A.) at para. 24, (2000), [2001] 7 W.W.R. 476 (Sask. C.A.); Van Der Ploeg v. Quick (1983), 27 Alta. L.R. (2d) 221 (Alta. Master) (M); Moore v. Moore (1988), 23 B.C.L.R. (2d) 350 (B.C. S.C.); Traverse v. Turnbull (1996), 151 N.S.R. (2d) 302 (N.S. C.A.) at paras. 50-1, (1996), 47 C.P.C. (3d) 205 (N.S. C.A.). Sometimes litigants will be content with a “release”, because they wish to avoid delay, or they choose to take control of the production of records. But even if a party takes a release, and does noth- ing with it, that does not affect the burden of proof at trial. 23 Sometimes a party will go to trial even though its opponent’s discov- ery is incomplete. In that event, it may be content with knowing that the non-producing party does not have the evidence needed to meet the bur- den of proof. However, the non-producing party cannot take the position at trial that the missing evidence is the responsibility of the other party because it “had a release”. That is just an attempt to foist its own default under the Rules on its opponent. The party who was entitled to the docu- ment has no obligation to prove the non-producing party’s case for it. 24 The records of Nakita’s schooling entered into evidence were wholly inadequate to meet the burden of proof. There was nothing to explain Kohan v. Kohan The Court 67

why she had only 48 credits by age 19. There was no evidence on how many courses she was taking each semester, how many courses she had left, or when she might expect to complete high school. She claimed she had some unrecorded credits from Banff from 2013, but failed to prove them. The evidence disclosed that for one month in 2015 Nakita was at an ashram in India studying meditation; this is inconsistent with a dili- gent pursuit of her education. On this evidence it was impossible for the trial judge to conclude she was “making good progress”, or had been diligently pursing her education. The weight of the evidence is that she at best found it convenient not to withdraw from her parents’ care because she was pursing her singing career. Her attempts to finish her high school education were a secondary consideration. If she was a child of the mar- riage, it was not for educational reasons. 25 Notwithstanding the deferential standard of review, the respondent failed to prove on a balance of probabilities that Nakita remained a child of the marriage after her 18th birthday. The child support award set out in para. 1(b) of the Judgment is set aside.

Spousal Support 26 A central issue at the trial was the amount of spousal support that was payable. Since little if any spousal support had been ordered or paid in the 10 years between separation and the trial, the entire amount was “ar- rears”. The trial judge awarded a lump sum for arrears of spousal support of $500,000. 27 Spousal support is calculated having regard to the “condition, means, needs and other circumstances of each spouse”, consistently with the objectives set out in s. 15.2(6) of the Divorce Act: (6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-suffi- ciency of each spouse within a reasonable period of time. 68 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

The necessary analysis can only be done against fact findings about the circumstances of the two spouses. 28 The trial judge quoted lengthy passages from Moge, including the ob- servation that: [13] ... Fair distribution does not, however, mandate a minute de- tailed accounting of time, energy and dollars spent in the day-to-day life of the spouses, nor may it effect compensation for the economic losses in every case. While spousal support calculations are not always amenable to “precise accounting”, that does not mean that the issues arising out of any particu- lar marriage can be disregarded. Further, a spousal support award de- pends on findings being made from the evidence about key facts. The observation in Moge that a “minute detailed accounting” of the day-to- day contributions to the marriage is not called for does not sanction an award unsupported by a reasoned analysis. 29 The calculation of spousal support in this case was complicated by a number of factors: (a) there was a long period between separation and trial: approxi- mately 10 years (from separation in the last half of 2004 until the agreed termination of spousal support in February 2014); (b) shortly after the separation the respondent brought an interim ap- plication for spousal support. That application was dismissed, in part at least because at that time she was earning more than the appellant. No other application was brought for interim spousal support until about 2008; (c) before and during the marriage the appellant had little formal edu- cation. After the separation he pursued and obtained a MBA, es- sentially employing his own resources. This was not a situation where one spouse supported the family while the other spouse completed his or her education; (d) three years after the separation, the respondent formed another in- timate relationship which lasted 4 years. During that time she shared expenses with her new partner, and their incomes were also somewhat intertwined; (e) neither party had a consistent stream of income during the relevant 10 year period: (i) The respondent changed careers, was self-employed for a time, worked with or for another partner for about four Kohan v. Kohan The Court 69

years, and her financial records were incomplete and un- clear for many years; (ii) the appellant’s career was successful, and he was able to establish a good base salary. During the first five years af- ter separation it averaged about $155,000 per year. During the last five years of the separation it increased to the range of $270,000. The matter was complicated, however, by ex- tremely large bonuses he received in 2008, 2011 and 2013 (the 4th, 7th and 9th full years after separation), which dwarfed his regular salary for those years. The reasons do not engage these issues in any detail. 30 The trial judge’s reasons on the spousal support issue concluded: [58] It is true that, while Dad was on his way, he had not achieved his highest income until well after the separation. Moreover, he did not complete his MBA degree until 2009. [59] Nevertheless, he has enjoyed a large income and its associated lifestyle since separation, thanks, in part, to Mom’s efforts while they were together as a team. I think it is only fair that he share some of that material success with her, particularly since she has contributed to it. She has not done so well since their separation partly because she shifted her focus to her career from his. In 2012, as I said, she sold the matrimonial home and lived off the proceeds in part. Mom and Dad were together for about 11 years, and I think a period of spousal support from separation until Nakita reaches the age of 18 is reasonable which was February 25, 2014. [60] Dad argues that I ought not to follow the Spousal Support Advi- sory Guidelines. I agree that this situation is unique. Dad also argues that for purposes of spousal support I should cap his income at $350,000; with that, I disagree. Dad further argues that I should not award Mom more in retroactive support then she would have ob- tained had she proceeded in a diligent fashion following separation. I am restricting my award to what I think is fair on the facts before me and Mom’s contribution to the economic unit up to the separation and the economic consequences of the break-up to Mom while she fulfilled her role as Mother and chose her career path. Mom is not claiming ongoing spousal support and I agree that the objectives set out in section 15.2(6) are best served if a lump sum for spousal sup- port, including interest from separation to February 25, 2014, is awarded. I award under this head the sum of $500,000. 70 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

The appellant challenges this lump-sum award, to some extent based on the fact findings implicit in it, and in other respects because of the ab- sence of reasons explaining the result. 31 At trial the appellant raised a number of arguments covering entitle- ment to support, the right to claim support back to the date of separation, and quantum. On appeal he raises four issues: a) insufficient reasons to support the award; b) failure to address the objective of self-sufficiency; c) miscalculation of the respondent’s income; and d) using the appel- lant’s post-separation increase in income to calculate support.

Self-Sufficiency 32 The appellant argues that the trial judge failed to recognize the objec- tive of “self-sufficiency”. While that objective is one mentioned in the Divorce Act, it is not an objective that overrides all others: Corbeil v. Corbeil, 2001 ABCA 220 (Alta. C.A.) at para. 34, (2001), 98 Alta. L.R. (3d) 38, 286 A.R. 330 (Alta. C.A.). In fact, spousal support was termi- nated by agreement as of February 2014 which gave some recognition to the self-sufficiency principle. The trial judge found both compensatory and non-compensatory aspects to the spousal support claim. Given the finding that the respondent “acted reasonably” in light of the circum- stances that confronted her, including the children’s medical issues, no reviewable error is disclosed with respect to this issue.

Attribution of Income 33 The next issue relates to the respondent’s income. The appellant ar- gues that the trial judge should have attributed income to her because she was deliberately under-employed. At the time of separation the respon- dent was engaged in a financially rewarding real estate career. After the separation, she changed careers and her income dropped significantly. The appellant argued that she had acted unreasonably and income should be attributed to her. The trial judge declined to do so, excepting for three years in which he added $40,000 per year to her income, largely to ac- count for benefits she received from her new partner that were not clearly documented in her reported income. The trial judge found that the re- spondent had “struggled a bit to find herself”, but concluded that she had “acted reasonably in all of the circumstances”. He also concluded that: “I don’t think the law requires her to forgo her own sense of job satisfac- tion”. These findings of fact might be described as generous, but they do not disclose any palpable and overriding error. Kohan v. Kohan The Court 71

Post-Separation Increase in Income 34 As noted, the appellant earned very large bonuses in the 4th, 7th and 9th full years after separation. The appellant argued that no realistic con- tribution by the respondent to those bonuses could be established, and that his income in any year should be capped at $350,000. While recog- nizing that the circumstances of this marriage were “unique”, the trial judge dismissed this argument by saying “with that, I disagree”. The ap- pellant argues on appeal that these reasons are inadequate to justify the award, and that there is no basis on which these bonuses can be traced back to any contribution by the respondent. 35 Both of these parties had very little formal education during the mar- riage. They obviously both had a significant work ethic, and the trial judge found that they had a symbiotic relationship during the marriage. They worked well as a team, and were able to accomplish more than either could have accomplished alone: [53] Her skill set, in my view, complemented his. He was a tough, business-minded executive with all the required skills necessary to achieve what he has. She was committed to their shared success and to his career as an executive. She was very much in a supporting role, but she was committed to that role leaving him free to pursue his career. Up until shortly before the separation, she did what she could do to facilitate his success. I do not minimize at all his efforts both before and after the separation, but I have no doubt that Mom’s ef- forts during their time together contributed significantly to Dad’s success. These findings are supported by the record, but they do not explain why the bonuses should be factored in the calculation of spousal support, at least without some adjustment. 36 The circumstances of these parties changed significantly during the long period of separation prior to trial. The appellant obtained his MBA. He remarried in 2008. The respondent was in another relationship be- tween 2005 and 2009. During this period the appellant changed employ- ers and jobs several times, each time increasing his responsibility and income. The appellant’s uncontradicted evidence was that the bonuses arose from unprecedented market conditions in the new housing market: So that is a result of, I think, in the industry what we would refer to as the perfect storm. In ’06 and ’07, Alberta was experiencing un- precedented net migration. We had low interest rates, we had high levels of employment, and the new home prices were just starting to escalate out of control. It became — and what entered the market 72 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

was people doing speculation and it was a bit of a feeding frenzy. We’d have builders, like — ourselves we started capping sales. We started saying, you know what, we can only build, so many so we’re going to say this area’s only allowed three sales for the month and that’s it. And customers were saying, Do you have that home available and they’d be looking in south Edmonton and they’d say, No, and they’d say, Well, I’ll take the one that’s up in north Edmonton, sight unseen. Like, people were buying and flipping properties and — and especially for my company, Ster- ling Homes, which had a lot of spec homes, the prices — we were trying to find a way to put a brake on it by raising prices. Usually that stops the consumers, and unfortunately this caused them to desire it even more and prices were — were spiralling upwards of $10,000 a month. It is difficult to attribute these bonuses to any contributions of the respon- dent, and the reasons do not elucidate the connection. 37 There is no rule that post-separation increases in income cannot be considered in determining spousal support. Such increases can be a part of the “condition, means, needs and other circumstances of each spouse”. The Spousal Support Advisory Guidelines provide in part: 14.3. ... Some rough notion of causation is applied to post-separation income increases for the payor, in determining both whether the in- come increase should be reflected in increased spousal support and, if it should, by how much. It all depends on the length of the mar- riage, the roles adopted during the marriage, the time elapsed be- tween the date of separation and the subsequent income increase, and the reason for the income increase (e.g. new job vs. promotion within same employer, or career continuation vs. new venture). The extent of sharing of these post-separation increases involves a complex, fact-based decision. As explained by Prof. R. Thompson in “To Vary, to Review, Perchance to Change: Changing Spousal Support” (2012), 31 CFLQ 355 at pp. 372- 3: Where a child support payor’s income increases after separation, the child automatically gets to share the full benefit of the parent’s im- proved income by way of child support. There is no “entitlement” issue there. In the law of spousal support, there is an intervening enti- tlement question, as one spouse does not automatically get to share in the post-separation good fortune of the other spouse. On variation or review, a recipient may get to share none, some or all of the payor’s post-separation income increase. The SSAG [Spousal Support Advi- Kohan v. Kohan The Court 73

sory Guidelines] cannot simply be applied to the income increase, without more careful analysis. As noted, there must be some analysis of the connection between the payee spouse’s contribution and the increase. This will particularly be the case with “one-time” bonuses based on anomalous business conditions. 38 Thompson v. Thompson, 2013 ONSC 5500 (Ont. S.C.J.) at para. 103 (footnotes omitted) provides a useful summary of some of the factors that might be considered in determining the impact on spousal support of post-separation increases in income: a) A spouse is not automatically entitled to increased spousal support when a spouse’s post-separation income increases. b) The right to share in post-separation income increases does not typically arise in cases involving non-compensatory claims, since the primary focus of such claims is the standard of living enjoyed during the relationship. c) Compensatory support claims may provide a foundation for enti- tlement to share in post-separation income increases in certain cir- cumstances. The strength of the compensatory claim and the na- ture of the recipient’s contributions appear to be the major factors which may tip the balance either for or against an entitlement to share in the increased income. d) The recipient spouse may be permitted to share in post-separation increases in earnings if they can demonstrate that they made con- tributions that can be directly linked to the payor’s post-separation success. The nature of the contributions does not have to be ex- plicit, such as contribution to the payor’s education or training. The question of whether the contributions made by the recipient specifically influenced the payor’s post-separation success will depend on the unique facts of every case. e) A spousal support award is more likely to take into account post- separation income increases where the relationship was long-term, the parties’ personal and financial affairs became completely inte- grated during the course of the marriage and the recipient’s sacri- fices and contributions for the sake of the family and resulting be- nefits to the payor have been longstanding and significant. When this type of long history of contribution and sacrifice by a recipi- ent spouse exists, the court will be more likely to find a connec- tion between the recipient spouse’s role in the relationship and the 74 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

payor’s ability to achieve higher earnings following the separation. f) In determining whether the contributions of the recipient were suf- ficient, the court should consider such factors as whether the par- ties divided their family responsibilities in a manner that indicated they were making a joint investment in one career, and whether there was a temporal link between the marriage and the income increase with no intervening change in the payor’s career. g) If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases. h) By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and devel- oped the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is re- lated to an event that occurred during the post separation period. i) Assuming primary responsibility for child care and household du- ties, without any evidence of having sacrificed personal educa- tional or career plans, will likely not be sufficient to ground an entitlement to benefit from post-separation income increases. j) Evidence that the post-separation income increase has evolved as a result of a different type of job acquired post-separation, a reor- ganization of the payor’s employment arrangement with new re- sponsibilities, or that the increase is a result of significant lifestyle changes which the payor has made since the separation may mili- tate against a finding that the recipient should share in the increase. k) Where the payor’s post-separation advancement is related prima- rily to luck or connections which he made on his own, rather than on contributions from the recipient, the claim for a share in post- separation income increases will be more difficult. l) The court may also consider the amount of time that has elapsed since separation as an indicator of whether the recipient’s contri- butions during the marriage are causally related to the post-separa- tion income increases. Kohan v. Kohan The Court 75

m) Evidence that the payor also made contributions to the recipient’s career advancement, or that the recipient has not made reasonable steps towards achieving self-sufficiency are also factors that may preclude an award that takes into account post separation income increases. In this appeal the major considerations were: the nature and immediacy of the respondent’s contributions, if any, to the increases in income; the length of the cohabitation (11 years); the duration of the separation (10 years); the temporal link between the separation and the increases; and the reason for the increases (here, market conditions). These factors were not overtly weighed at trial. 39 Findings of fact and inferences with respect to the appropriate weight to be given to post-separation income increases in determining spousal support are entitled to deference. However, the reasons under appeal do not disclose any such findings or analysis, and none is obvious from the record. The finding that the respondent contributed in a general sense to the appellant’s “skill set” is entitled to deference, but the bonuses in question did not arise from that skill set. The respondent made no mean- ingful contribution to the appellant’s MBA. The bonuses in question arose largely from unusual market conditions, unconnected with any con- tribution of the respondent to the marriage. They also arose many years after the separation, and after both parties had formed new relationships. On this record, the respondent did not meet the burden of demonstrating full entitlement to a share of those bonuses.

Adequacy of the Reasons 40 The appellant argues that the ultimate lump sum spousal support award of $500,000 is not explained in the reasons. The trial judge sum- marized the claim: [57] I find that she has entitlement to spousal support. Using the Spousal Support Advisory Guidelines, Mom claims a lump sum for retroactive spousal support from the time of the separation until Nakita turns 18, which was February of 2014. The claim is in the amount of $884,956.67 based on the lower end of the range and over a million dollars based on the high end of the range. Again, blind adherence to tables is not required nor is it, in my view, desirable in a case such as this which is unique. The goal is to achieve fairness in dividing the economic consequences of the relationship and its demise. 76 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

The trial judge concluded “I award under this head the sum of $500,000”. 41 The issue here is not whether the spousal support should have been ordered payable as a “lump sum”. Section 15.2(1) of the Divorce Act confirms that spousal support can be awarded as a lump sum, although lump sum payments are the exception: Lauderdale v. Lauderdale (1997), 200 A.R. 198 (Alta. C.A.) at para. 5, (1997), 29 R.F.L. (4th) 34 (Alta. C.A.). The term “lump sum” is however used in several different ways: (a) Sometimes the quantum of arrears of spousal or child support will be calculated, and the resulting sum will be payable immediately because it reflects arrears of support. In that context the phrase “lump sum” simply refers to the mathematical total of all of the periodic arrears. (b) A trial judge may find an entitlement to future periodic spousal support, but rather than ordering that it be paid periodically, the judge may order the present value of the future sums to be paid in a “lump sum”. That is sometimes to promote a “clean break”, to address past or future problems with enforcement, to allow for set- offs against other payments such as matrimonial property equali- zation payments, etc.: Rockall v Rockall, 2010 ABCA 278 at pa- ras. 23-4, 35 Alta LR (5th) 1, 490 AR 135. The phrase “lump sum” is most accurately used to describe this type of support award. (c) On other occasions a trial judge may determine that there is an entitlement to past or future support, but rather than calculating the periodic entitlement the trial judge will just select a “lump sum” award. Because periodic payments are subject to different income tax treatment, this approach must always be used cau- tiously, especially when the Spousal Support Advisory Guidelines are used as a basis for the calculation: Samoilova v Mahnic, 2014 ABCA 65 at para. 28, 41 RFL (7th) 83. Because all of the spousal support in this case related to prior time peri- ods, the entire amount was “arrears” when the judgment was pro- nounced, meaning that the award potentially fell into the first category of “lump sum” support payments. The $500,000 spousal support award in this case properly falls, however, under the third category; the amount was simply set “at large”. The trial judge did not identify the quantum of the periodic support, nor the income levels supporting the underlying analysis, and simply pronounced the award. When this type of “lump Kohan v. Kohan The Court 77

sum” spousal support is ordered without an adequate explanation for the calculation, the adequacy of the reasons will be called into question: Rockall at paras. 26-8. 42 The trial judge did refer to a few of the issues that had been raised. He noted that the respondent’s financial records were inadequate, but concluded that she was not intentionally trying to withhold information. He did not deal in detail with the various specific inconsistencies identi- fied by the appellant. He was prepared to accept the respondent’s expla- nations, and found that her reliance on her accountant was reasonable. In calculating child support he did attribute $40,000 per annum of income to her in 2009, 2010 and 2011. He presumably used those same income numbers when determining spousal support. 43 The respondent argued that she had provided the appellant with all of the raw data about her finances, yet the appellant had done nothing with it. She criticized the appellant for not retaining a forensic accountant to analyse the information. The burden of proving the entitlement to spousal support was, however, on the respondent. The appellant had no obligation to retain a forensic accountant to prove her case for her, and since the respondent did not retain a forensic accountant the appellant had no need for rebuttal evidence. The trial judge’s statement that: “In any event, Dad had all of the production related to her financial situa- tion” does not answer the point. The appellant identified a number of discrepancies in that information and was entitled to put them to the re- spondent at trial. 44 As previously noted, the trial judge erred in including the appellant’s bonus income in the spousal support calculations, at least without mak- ing some significant adjustments. Further, it appears that the Spousal Support Advisory Guidelines range referred to ($884,956.67 to over $1 million) did not include the extra $40,000 of income attributed by the trial judge to the respondent for 2009, 2010 and 2011. In addition, the Spousal Support Advisory Guidelines calculations assume that the pay- ments are to be periodic, and will be deductible by the payor and taxable in the hands of the payee. The lump sum payment ordered may not be taxable and deductible unless it could be qualified as a “Qualifying Ret- roactive Lump-Sum Payment”. The trial judge made no mention of these issues. 45 The largest concern about the $500,000 lump sum payment is, how- ever, that its source is completely unexplained on the record. While “fair- ness” is the conceptual objective of any adjudication, an award of 78 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

spousal support must be tied back to the evidence and the criteria in the Divorce Act. The observation in Moge that a “minute detailed account- ing” is not called for does not encourage pulling numbers out of the air. A payor spouse who is ordered to pay such a large sum in spousal sup- port is entitled to know how it was calculated. It follows that the lump sum spousal support payment cannot be sustained. 46 This litigation has been ongoing for over a decade, and the parties have already been through one trial. There is no point in re-litigating some issues that have already been adequately canvassed. The broad en- titlement to spousal support has been established, if not the precise years in which it would be payable. The finding that the respondent acted rea- sonably in her career choices should not be disturbed. In light of the ap- pellant’s position at trial, his income in any year should be capped at $350,000. Considering all the factors in this case, including the lengthy period between separation and trial, and the fact that the bonuses were triggered by unprecedented market conditions, this outcome is fair and just to both sides. 47 The quantum of spousal support must be referred back to the trial court. The appellant’s and respondent’s income must be established for each year for which spousal support is payable. The amount of spousal support payable for each year should be established, having regard to the provisions of the Divorce Act. The parties are undoubtedly aware of dis- pute resolution options other than reopening the trial.

Costs 48 The trial judge awarded the respondent costs of the trial to be as- sessed on two times column 4 of Schedule C. He also awarded a 10% premium on the fee component of the costs after the date of an offer made by the respondent with respect to Nakita. The trial judge thought that an enhancement of the costs award was justified because “there were complex issues and they were hard fought”. There was no evidence of any litigation misconduct, and indeed the trial judge remarked that: “I thought it was well done from both sides”. 49 Since the support award for Nakita has been reversed on appeal, there is no longer any justification for the 10% premium. In addition, follow- ing this appeal the respondent’s success at trial has been significantly reduced. 50 The trial judge noted that the issues were complex, but did not pro- vide any further analysis. The record disclosed that the respondent had Kohan v. Kohan The Court 79

seven separate counsel during the course of the proceedings. A good deal of the complexity arose from the unsatisfactory state of the respondent’s financial records. In addition, a considerable amount of pre-trial effort was directed towards parenting issues. The respondent insisted on sole custody, which caused the preparation of two parenting reports because the respondent would not accept the recommendations in the first one. In the end, this issue became moot because of the children’s age at the time of trial. 51 The appeal as to costs should be allowed, and the respondent should be awarded costs of the trial assessed on column 4, without any premium for the offer. The appellant has been substantially successful on appeal, and is entitled to costs of the appeal on the same scale.

Conclusion 52 In conclusion, the appeal is allowed in part. The award of child sup- port for the adult child of the marriage is set aside. The lump sum award of spousal support is set aside, and the quantum of spousal support is submitted back to the trial court to be dealt with in accordance with these reasons. The appeal as to costs is allowed, and the respondent is awarded costs of the trial assessed on column 4. The appellant is entitled to as- sessed costs of the appeal on the same scale. Appeal allowed. 80 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[Indexed as: Alberta v. Suncor Energy Inc] In the Matter of an Investigation by the Ministry of Labour, pursuant to the Alberta Occupational Health Safety Act, RSA 2000, c O-2 Her Majesty the Queen In Right of Alberta, Applicant and Suncor Energy Inc, Richard Howden, Jim Harris, Corey Black, Andrew Robinson, Patrick Fortune, Juan Bracho, Wayne Macdonald, Berislav Samardzic, Ryan Tarkowski, Catherine Canning and Richard Loiselle, Respondents Alberta Court of Queen’s Bench Docket: Edmonton 1603-03547 2016 ABQB 264 Don J. Manderscheid J. Heard: March 22, 2016 Judgment: May 9, 2016 Labour and employment law –––– Occupational health and safety legisla- tion — Miscellaneous –––– Production of documents — Privilege — Employee was electrocuted at employer’s workplace and subsequently passed away — Employer reported incident pursuant to Occupational Health and Safety Act — Both employer and Ministry of Labour conducted investigation — Employer concluded litigation was real and distinct possibility and so treated all docu- ments as privileged and confidential — Ministry issued demand to employer pursuant to s. 19 of Act for production of all documents relating to incident — Employer claimed privilege over its internal investigation, notwithstanding that its investigation was required under s. 18(3) of Act — Ministry brought applica- tion for order requiring employer to produce requested documents — Applica- tion adjourned on terms — Issue of privilege was referred to referee who would determine process whereby employer would provide documents and submis- sions, and referee would make recommendations to court for its consideration and approval — Employer was entitled to assert litigation privilege notwith- standing that it had statutory obligation to conduct investigation — Fact that in- vestigation had dual purpose did not ipso facto extinguish or abrogate em- ployer’s right to privilege where dominant purpose for conducting investigation was in contemplation of litigation — Denying employer’s entitlement to claim litigation privilege would prejudice employer’s right to defend itself against any potential civil actions, criminal prosecutions, or regulatory claims — It was rea- sonable for employer to have anticipated or contemplated that there was very good chance that some kind of litigation was possible — Information and docu- Alberta v. Suncor Energy Inc 81 ments created and/or collected during investigation with dominant purpose that they would assist in contemplated litigation were integrally covered by litigation privilege — Notably, s. 18(3) of Act limited employer’s post-investigation du- ties to preparing report and ensuring copy of report was readily available for inspection — Limited use immunity provisions in ss. 18(5) and 19(5) of Act were also indicative of legislature’s intent to extend some form of privilege to investigation and report — With respect to solicitor-client privilege, what was unclear at this point was scope of communications between employer and its lawyers — Referee process was necessary given volume of materials over which employer claimed privilege and avoidance of prejudice to party claiming privilege. Civil practice and procedure –––– Discovery — Discovery of documents — Privileged document — Solicitor-client privilege. Cases considered by Don J. Manderscheid J.: Blank v. Canada (Department of Justice) (2006), 2006 SCC 39, 2006 Car- swellNat 2704, 2006 CarswellNat 2705, [2006] S.C.J. No. 39, 40 C.R. (6th) 1, 51 C.P.R. (4th) 1, 270 D.L.R. (4th) 257, (sub nom. Blank v. Canada (Minister of Justice)) 352 N.R. 201, 47 Admin. L.R. (4th) 84, (sub nom. Blank v. Canada (Minister of Justice)) [2006] 2 S.C.R. 319, 2006 CSC 39 (S.C.C.) — considered Blood Tribe Department of Health v. Canada (Privacy Commissioner) (2008), 2008 SCC 44, 2008 CarswellNat 2244, 2008 CarswellNat 2245, (sub nom. Privacy Commissioner of Canada v. Blood Tribe Department of Health) 2008 C.L.L.C. 210-030, [2008] S.C.J. No. 45, 67 C.P.R. (4th) 1, 376 N.R. 327, 74 Admin. L.R. (4th) 38, 294 D.L.R. (4th) 385, (sub nom. Canada (Privacy Commissioner) v. Blood Tribe Department of Health) [2008] 2 S.C.R. 574 (S.C.C.) — considered Canadian Natural Resources Ltd. v. ShawCor Ltd. (2014), 2014 ABCA 289, 2014 CarswellAlta 1582, 376 D.L.R. (4th) 581, [2014] A.J. No. 976, 580 A.R. 265, 620 W.A.C. 265, 2 Alta. L.R. (6th) 146 (Alta. C.A.) — considered College of Physicians & Surgeons (British Columbia) v. British Columbia (Information & Privacy Commissioner) (2002), 2002 BCCA 665, 2002 Car- swellBC 2942, [2003] 2 W.W.R. 279, 9 B.C.L.R. (4th) 1, 23 C.P.R. (4th) 185, 176 B.C.A.C. 61, 290 W.A.C. 61, [2002] B.C.J. No. 2779 (B.C. C.A.) — considered Dorchak v. Krupka (1997), 196 A.R. 81, (sub nom. Roy v. Krilow) 141 W.A.C. 81, 1997 CarswellAlta 314, [1997] A.J. No. 308, 1997 ABCA 89 (Alta. C.A.) — referred to Ebsworth v. Alberta (2005), 2005 ABQB 976, 2005 CarswellAlta 1936, 137 C.R.R. (2d) 49, 396 A.R. 345, [2005] A.J. No. 1792 (Alta. Q.B.) — referred to 82 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co. (1988), 61 Alta. L.R. (2d) 319, 22 C.P.R. (3d) 290, 90 A.R. 323, 1988 CarswellAlta 148, [1988] A.J. No. 810, 1988 ABCA 282 (Alta. C.A.) — referred to Hatch Ltd. v. Factory Mutual Insurance Co. (2015), 2015 NSCA 60, 2015 Car- swellNS 527, [2015] N.S.J. No. 256, 386 D.L.R. (4th) 597, 1137 A.P.R. 371, 361 N.S.R. (2d) 371, [2015] I.L.R. I-5774, 75 C.P.C. (7th) 18, 51 C.C.L.I. (5th) 173 (N.S. C.A.) — considered Maranda c. Qu´ebec (Juge de la Cour du Qu´ebec) (2003), 2003 SCC 67, 2003 CarswellQue 2477, 2003 CarswellQue 2478, 178 C.C.C. (3d) 321, [2003] S.C.J. No. 69, (sub nom. Maranda v. Richer) 232 D.L.R. (4th) 14, 15 C.R. (6th) 1, (sub nom. Maranda v. Leblanc) 311 N.R. 357, (sub nom. Maranda v. Richer) [2003] 3 S.C.R. 193, 113 C.R.R. (2d) 76 (S.C.C.) — considered Opron Construction Co. v. Alberta (1989), 100 A.R. 58, 71 Alta. L.R. (2d) 28, 1989 CarswellAlta 176, [1989] A.J. No. 1012, 1989 ABCA 279 (Alta. C.A.) — referred to R. v. Bruce Power Inc. (2009), 2009 ONCA 573, 2009 CarswellOnt 4157, 245 C.C.C. (3d) 315, [2009] O.J. No. 3016, 254 O.A.C. 335, 98 O.R. (3d) 272 (Ont. C.A.) — followed R. v. McClure (2001), 2001 SCC 14, 2001 CarswellOnt 496, 2001 CarswellOnt 497, [2001] S.C.J. No. 13, 151 C.C.C. (3d) 321, 195 D.L.R. (4th) 513, 40 C.R. (5th) 1, 266 N.R. 275, [2001] 1 S.C.R. 445, 142 O.A.C. 201, 80 C.R.R. (2d) 217, REJB 2001-22807 (S.C.C.) — referred to R. v. Trang (2002), 2002 ABQB 390, 2002 CarswellAlta 726, [2002] A.J. No. 680, [2002] 10 W.W.R. 720, 6 Alta. L.R. (4th) 132, 315 A.R. 306 (Alta. Q.B.) — considered Raj v. Khosravi (2015), 2015 BCCA 49, 2015 CarswellBC 315, 74 M.V.R. (6th) 220, 368 B.C.A.C. 62, 633 W.A.C. 62, 72 B.C.L.R. (5th) 223, 45 C.C.L.I. (5th) 207, [2015] B.C.J. No. 212 (B.C. C.A.) — considered S. (T.), Re (2013), 2013 ABPC 309, 2013 CarswellAlta 2410, [2013] A.J. No. 1318, 88 Alta. L.R. (5th) 285, 40 R.F.L. (7th) 479, 576 A.R. 384 (Alta. Prov. Ct.) — referred to Talisman Energy Inc. v. Flo-Dynamics Systems Inc. (2015), 2015 ABQB 561, 2015 CarswellAlta 1674, [2015] A.J. No. 978, 78 C.P.C. (7th) 333 (Alta. Q.B.) — considered Thomson v. Berkshire Investment Group Inc. (2007), 2007 BCSC 50, 2007 Car- swellBC 60, [2007] B.C.J. No. 45 (B.C. S.C.) — followed TransAlta Corp. v. Alberta (Market Surveillance Administrator) (2015), 2015 ABQB 180, 2015 CarswellAlta 486, [2015] A.J. No. 319, 18 Alta. L.R. (6th) 364 (Alta. Q.B.) — referred to TransAlta Corp. v. Alberta (Market Surveillance Administrator) (2014), 2014 ABCA 196, 2014 CarswellAlta 939, 55 C.P.C. (7th) 235, 374 D.L.R. (4th) 124, [2014] 9 W.W.R. 678, 100 Alta. L.R. (5th) 52, 577 A.R. 32, 613 W.A.C. 32 (Alta. C.A.) — referred to Alberta v. Suncor Energy Inc Don J. Manderscheid J. 83

Universal Sales Ltd. v. Edinburgh Assurance Co. (2009), 2009 FC 151, 2009 CarswellNat 347, 341 F.T.R. 185 (Eng.), 2009 CF 151, 2009 CarswellNat 4927, [2009] F.C.J. No. 196 (F.C.) — referred to Statutes considered: Alberta Evidence Act, R.S.A. 2000, c. A-18 Generally — referred to Fatality Inquiries Act, R.S.A. 2000, c. F-9 Generally — referred to Occupational Health and Safety Act, R.S.A. 2000, c. O-2 Generally — referred to s. 18 — considered s. 18(1) — considered s. 18(3) — considered s. 18(3)(a) — considered s. 18(3)(b) — considered s. 18(3)(c) — considered s. 18(5) — considered s. 19 — considered s. 19(1) — considered s. 19(2) — considered s. 19(3) — considered s. 19(5) — considered

APPLICATION by Ministry for order requiring employer to produce requested documents.

Derek A. Cranna, Sharon A. Roberts, for Applicant David Myrol, for Respondent, Suncor Energy Inc Mona Duckett, Q.C., for 10 named Respondents (excluding Catherine Canning) Marshall Hopkins, for Respondent, Catherine Canning

Don J. Manderscheid J.: Introduction 1 The Ministry of Labour [Ministry or Applicant] with the Government of Alberta, which has responsibility for the administration of the Occu- pational Health and Safety Act, RSA 2000, c O-2 [OHS Act], seeks an order compelling Suncor Energy Inc [Suncor] to provide information and records related to a workplace fatality. Suncor claims both litigation priv- ilege and solicitor-client privilege over the requested information and records. 84 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

2 At the centre of the Ministry’s application are the issues of the scope of Occupational Health and Safety’s [OHS] authority to request informa- tion that has been created and/or collected during an investigation man- dated by the provisions of the OHS Act, s 18(3), and the right of Suncor to refuse the information requests by asserting claims of litigation privi- lege and solicitor-client privilege over the records as well as individuals involved in the investigation of the fatality incident. 3 During oral submissions, the Court was informed that the Ministry’s legal counsel and the legal counsel for all the named individuals in this application have agreed to adjourn the application for access to the indi- vidual investigators named as respondents in this matter. Consequently, the Ministry’s application for access to these individual members of Sun- cor’s investigation team was adjourned sine die by this Court.

Background Facts 4 On April 20, 2014, an employee of Suncor was involved in a fatal workplace accident at Suncor’s facility near Fort McMurray, Alberta [Accident]. The employee had an electrical contact that caused serious injuries, which led to his death. 5 On the same day, after Suncor reported the incident, pursuant to the OHS Act, s 18.1, OHS commenced an investigation of the Accident. 6 Similarly, on the same April 20, 2014, Suncor commenced an internal investigation. Under section 18(3)(a) of the OHS Act, Suncor has a statu- tory obligation to “carry out an investigation into the circumstances sur- rounding the serious injury or accident.” However, the evidence of Sun- cor also indicates that “[a]s a result of [Suncor’s] assessment of the information available regarding the Accident” an internal investigation team was constituted with direction to endorse “all documents as being privileged and confidential.” Suncor’s affidavit evidence is that its man- agement had “reached the conclusion [that] litigation was a real and dis- tinct possibility and that a thorough internal investigation, which would be privileged and confidential, would be needed to provide Suncor with the necessary information required to provide proper and fulsome legal advice concerning the Accident and in anticipation of, or in contempla- tion of, potential litigation that could be brought against Suncor”: Affida- vit of Conor Chell, paras 7-11 [Chell’s Affidavit]. 7 On May 5, 2014, OHS Officers issued a demand to Suncor, pursuant to the OHS Act, s 19, in which they requested Suncor to produce: Alberta v. Suncor Energy Inc Don J. Manderscheid J. 85

a. Copies of all notes, records, photos/videos, documents, TapRoot or other safety root cause determination process that were taken or collected by the Suncor Investigators; b. Copies of all photographs/videos taken respecting the Incident; and c. Copies of all witness statements and interviews taken with respect to the Incident. [Refused Information]. In addition, OHS Officers sought to interview individual members of Suncor’s internal investigation team. 8 On May 20, 2014, Suncor refused to specifically produce “copies of all witness statements taken by Suncor in respect of the Accident” based on the ground that they were collected “as part of its internal investiga- tion and as such are the subject of legal privilege”: see, Chell’s Affidavit, para 27. 9 Notwithstanding, in the months after the Accident, OHS Officers col- lected some documents and conducted approximately 15 witness inter- views of Suncor’s employees with respect to the Accident: Chell’s Affi- davit, para 26. 10 On October 14, 2014, and pursuant to the OHS Act, s 18, OHS Of- ficers issued a demand to Suncor to investigate the Accident and prepare a report that includes preventive measures adopted. Suncor submitted its written report to OHS Officers on November 14, 2014. The Ministry confirmed Suncor’s compliance on December 5, 2014. 11 On October 23, 2015, the Ministry issued a new demand for a broader range of documents, including: (a) a list of names and contact informa- tion of all persons who gave statements or were interviewed by or on behalf of Suncor in respect of the Accident; (b) copies of all witness statements and interviews taken with respect to the Accident; (c) a list of names and contact information for all persons who were involved in the investigation process, either directly or indirectly, on behalf of Suncor; and (d) copies of all notes, records, photos, videos, documents, root cause analysis taken or collected by Suncor’s internal investigation team: Chell’s Affidavit, para 29. 12 On November 25, 2015, Suncor produced the names of all persons interviewed with respect to the Accident, as well as the names and con- tact information of its internal investigation team. However, Suncor ex- pressly asserted legal privilege over its internal investigation, and con- 86 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

firmed that the provision of information to the Ministry was not a waiver of its entitlement to privilege over them. 13 On December 4, 2015, the Ministry rejected Suncor’s assertion of privilege. OHS wrote: This information was collected by [Suncor] in order to meet its statu- tory obligation under s. 18(3) of the Occupational Health and Safety Act. Litigation privilege can attach to information where the informa- tion is collected for the dominant purpose of preparing for litigation. As the investigation was mandatory under the statute, the dominant purpose for the collection of the information was to meet that statu- tory requirement, not preparing for litigation. 14 On December 10, 2015, Suncor requested a brief extension to con- sider its options. On December 11, 2015, OHS advised Suncor by a writ- ten letter that: (a) OHS was considering issuing an administrative penalty to Suncor in the amount of $5,000; (b) Suncor’s failure to provide the refused information was impeding a fatality investigation; (c) OHS re- quests a meeting with Suncor, to be held on December 17, 2015, in order to discuss the proposed administrative penalty: Affidavit of Robert Fea- gan, para 33 [Feagan’s Affidavit]. 15 The meeting scheduled for December 17, 2015 was held without resolving the divergent positions of both parties. On December 21, 2015, Suncor re-affirmed its position on legal privilege; and on December 22, 2015, the Ministry imposed a $5,000 administrative penalty on Suncor. 16 On January 4, 2016, Suncor filed an originating application in this Court seeking injunctive and declaratory remedies to, inter alia, prohibit the Ministry from compelling the production of privileged documents and other records, or conducting interviews with Suncor’s investigators [Suncor Application]. 17 On January 12, 2016, the Ministry advised Suncor that its claims of legal privilege lacked an evidentiary foundation, and requested that Sun- cor identify the records over which it claimed privilege with sufficient particularity to allow the Ministry to consider its position. By a letter dated March 2, 2016, Suncor provided “a list of records included in the Refused Information containing 8 sub-categories” and four binders of documents, labeled as “Suncor Documents (Non-Privileged or Privilege Waived”: see, OHS’s Brief, paras 19-20. 18 On January 29, 2016, Suncor filed a written brief in support of the Suncor Application, and the Ministry filed its response brief to the Sun- cor Application on February 5, 2016. Alberta v. Suncor Energy Inc Don J. Manderscheid J. 87

19 On February 4, 2016, the Ministry advised Suncor that it would bring its own Originating Application in the within Action. Accordingly, on February 10, 2016, Suncor adjourned the Suncor Application sine die with the Ministry’s consent.

Issues 20 There are three general, but interrelated, issues involved in this proceeding: (i) Is Suncor entitled to claim litigation privilege over the information collected during its internal investigation? (ii) Are the documents and other records created or collected during Suncor’s internal investigation privileged? and (iii) Has Suncor provided sufficient justification for its claims to litiga- tion privilege and solicitor-client privilege regarding the Refused Information?

Law 21 Sections 18 and 19 of the OHS Act provide, inter alia, as follows: 18 (3) If an injury or accident referred to in subsection (2) occurs at a work site or if any other serious injury or any other accident that has the potential of causing serious injury to a person occurs at a work site, the prime contractor or, if there is no prime contractor, the con- tractor or employer responsible for that work site shall (a) carry out an investigation into the circumstances surrounding the serious injury or accident, (b) prepare a report outlining the circumstances of the serious in- jury or accident and the corrective action, if any, undertaken to prevent a recurrence of the serious injury or accident, and (c) ensure that a copy of the report is readily available for inspec- tion by an officer. ... (5) A report prepared under this section is not admissible as evidence for any purpose in a trial arising out of the serious injury or accident, an investigation or public inquiry under the Fatality Inquiries Act or any other action as defined in the Alberta Evidence Act except in a prosecution for perjury or for the giving of contradictory evidence. ... 19(1) If an accident occurs at a work site, an officer may attend at the scene of the accident and may make any inquiries that the officer 88 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

considers necessary to determine the cause of the accident and the circumstances relating to the accident. (2) Every person present at an accident when it occurred or who has information relating to the accident shall, on the request of an officer, provide to the officer any information respecting the accident that the officer requests. (3) An officer may, for the purposes of determining the cause of the accident, seize or take samples of any substance, material, product, tool, appliance or equipment that was present at, involved in or re- lated to the accident. ... (5) Any statement given under this section is not admissible in evi- dence for any purpose in a trial, public inquiry under the Fatality Inquiries Act or other proceeding except to prove (a) non-compliance with this section, or (b) a contravention of section 41(3) in an action or proceeding under this Act. 22 The Supreme Court of Canada in Blank v. Canada (Department of Justice), 2006 SCC 39 (S.C.C.) at para 28, [2006] 2 S.C.R. 319 (S.C.C.) [Blank], said: R. J. Sharpe (now Sharpe J.A.) has explained particularly well the differences between litigation privilege and solicitor-client privilege: It is crucially important to distinguish litigation privilege from solicitor-client privilege. There are, I suggest, at least three important differences between the two. First, solicitor-client privilege applies only to confidential com- munications between the client and his solicitor. Litiga- tion privilege, on the other hand, applies to communica- tions of a non-confidential nature between the solicitor and third parties and even includes material of a non-com- municative nature. Secondly, solicitor-client privilege ex- ists any time a client seeks legal advice from his solicitor whether or not litigation is involved. Litigation privilege, on the other hand, applies only in the context of litigation itself. Thirdly, and most important, the rationale for solic- itor-client privilege is very different from that which un- derlies litigation privilege. This difference merits close at- tention. The interest which underlies the protection accorded communications between a client and a solicitor from disclosure is the interest of all citizens to have full and ready access to legal advice. If an individual cannot Alberta v. Suncor Energy Inc Don J. Manderscheid J. 89

confide in a solicitor knowing that what is said will not be revealed, it will be difficult, if not impossible, for that in- dividual to obtain proper candid legal advice. Litigation privilege, on the other hand, is geared directly to the process of litigation. Its purpose is not explained adequately by the protection afforded lawyer-client com- munications deemed necessary to allow clients to obtain legal advice, the interest protected by solicitor-client priv- ilege. Its purpose is more particularly related to the needs of the adversarial trial process. Litigation privilege is based upon the need for a protected area to facilitate in- vestigation and preparation of a case for trial by the ad- versarial advocate. In other words, litigation privilege aims to facilitate a process (namely, the adversary pro- cess), while solicitor-client privilege aims to protect a re- lationship (namely, the confidential relationship between a lawyer and a client). (“Claiming Privilege in the Discovery Process”, in Special Lectures of the Law Society of Upper Canada (1984), 163, at pp. 164-65) 23 Litigation privilege is not confined to the court process and extends to regulatory proceedings: Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co., 1988 ABCA 282, 90 A.R. 323 (Alta. C.A.),cited in Thomson v. Berkshire Investment Group Inc., 2007 BCSC 50 (B.C. S.C.) at para 49, 2007 CarswellBC 60 (B.C. S.C.) [Berkshire Investments].

Discussion Issue I: Is Suncor entitled to claim litigation privilege over the information collected during its internal investigation? Ministry’s position 24 The Ministry (or OHS) argues that OHS Officers have implied au- thority to determine their own procedure to enable them to perform the functions assigned to them under the OHS Act, without the legislature detailing the particulars of that authority and how it may be applied: Ebsworth v. Alberta, 396 A.R. 345 (Alta. Q.B.) at paras 33-34, (2005), 396 A.R. 345 (Alta. Q.B.). 25 It submits that in circumstances where an investigation is mandated by a statute, claims of litigation privilege and the dominant purpose for obtaining investigative information should be carefully scrutinized. 90 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

26 OHS submits that the information collected by Suncor was for the purpose of meeting Suncor’s statutory obligation under the OHS Act, s 18(3). And that “[a]s the investigation was mandatory under the statute, the dominant purpose for the collection of the information was to meet that statutory requirement, not preparing for litigation.” 27 The Ministry states that, from the questioning of Mr. Chell, it is “un- clear whether there was some different investigation undertaken under section 18(3) of the Act from that investigation that Suncor deposes to in its affidavit”: Transcript of Proceedings, March 22, 2016, 8/2-4 [Transcript].

Suncor’s position 28 Suncor argues that litigation privilege applies in the context of an in- vestigation in respect of regulatory proceedings, and when a regulatory agency undertakes an investigation that “could result in the prosecution of offences with [potential] consequences,” which include the imposition of penalties or sanctions, litigation has commenced: TransAlta Corp. v. Alberta (Market Surveillance Administrator), 2014 ABCA 196 (Alta. C.A.) at para 40 [TransAlta]; College of Physicians & Surgeons (British Columbia) v. British Columbia (Information & Privacy Commissioner), 2002 BCCA 665 (B.C. C.A.) at paras 73-74, (2002), 23 C.P.R. (4th) 185 (B.C. C.A.) [College of Physicians of BC]. 29 Suncor maintains that although it was a single investigation that it carried out regarding the Accident, Canadian courts have concluded that “the fact that an investigation is mandated by statute is irrelevant to the functional analysis of the lawyer’s role. Lawyers must often undertake investigative work in order to give accurate legal advice. In this respect, investigation is integral to the lawyer’s function”: College of Physicians of BC at para 39. 30 Based on the uncontroverted evidence of Mr. Chell, Suncor contends that the internal investigation it conducted regarding the Accident “was for the dominant purpose of preparing to respond to actual or potential litigation”: Suncor’s Brief, para 21(f)-(g). Consequently, Suncor submits that notwithstanding the statutory obligation that requires it to carry out an investigation under the OHS Act, s 18, Suncor is entitled to claim liti- gation privilege, in light of the evidence before this Court on the domi- nant purpose of its investigation. Alberta v. Suncor Energy Inc Don J. Manderscheid J. 91

Analysis 31 The general question here starkly relates to whether litigation privi- lege can exist to cover documents created in the process of a single in- vestigation carried out in the context of a statutory requirement that an investigation must be conducted by the same entity claiming litigation privilege. In other words, how does Suncor’s assertion of litigation privi- lege over information and records collected during an internal investiga- tion interface with Suncor’s statutory obligation to conduct an investiga- tion and prepare a report under OHS Act, s 18? 32 Obviously, the legislative provisions of the OHS Act, ss 18(3)(a) and (b) constitute regulatory requirements that Suncor should “carry out an investigation into the circumstances surrounding the serious injury or ac- cident” as well as “prepare a report outlining the circumstances of the serious injury or accident and the corrective action, if any, undertaken to prevent a recurrence of the serious injury or accident.” These statutory obligations raise the possibility of another purpose or alternative motiva- tion for the investigation that Suncor conducted regarding the Accident, alongside Suncor’s claim that the internal investigation was carried out in anticipation of litigation. 33 The decision of the British Columbia Supreme Court in Berkshire In- vestments is significantly relevant and instructive on this particular issue. In that case, there was a complaint by an investor against his financial advisor, who was an employee of Berkshire Investment Group Inc [Berk- shire]. As a result of the complaint, one of the senior management of- ficers of Berkshire became concerned that there was a substantial risk of litigation from the complainant and that there was the possibility of regu- latory action by the BC Security Commission and/or Mutual Fund Dealer’s Association of Canada [MFDA]. The senior manager contacted Berkshire’s external legal counsel to seek legal advice as to how to proceed. 34 Based on the structure prescribed by its legal counsel, Berkshire im- mediately commenced an investigation into the alleged misconduct of its employee. The purpose of this investigation was to prepare for antici- pated litigation or regulatory proceedings against Berkshire by the af- fected investors (para 15). Notably, as a member of the MFDA, Berk- shire was also required by the rules and regulations of the MFDA to investigate complaints from clients (para 16, emphasis added). Since Berkshire must comply with the rules and regulations of MFDA as its primary regulator, Berkshire contacted the MFDA to inform it of related 92 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

developments. The MFDA then commenced a formal investigation dur- ing which it requested records, reports and analysis (para 37). Based on the advice of its legal counsel and compliance department, Berkshire provided the requested information to the MFDA “in the expectation it would be held in confidence and under no expectation it would be re- quired to be produced in civil litigation” (para 38). 35 The plaintiff in Berkshire Investments brought an application seeking an order that Berkshire provide a supplemental list of documents that was to include “reports, e-mails, notes and any electronic or written doc- umentation arising out of the investigation into the conduct” of his finan- cial advisor. Berkshire refused to produce some of the documents over which it claimed both litigation privilege and solicitor-client privilege. 36 Interestingly, the plaintiff in Berkshire Investments argued that “Berk- shire’s obligations pursuant to its internal policies and bylaws and the directives and policies of the MFDA to investigate and respond to com- plaints and report the complaints to the MFDA negates the suggestion that the documents were created for the dominant purpose of litigation [and as such] Berkshire has not satisfied the onus with respect to the dominant purpose of the documents”: Ibid at para 61). 37 In other words, the plaintiff in Berkshire Investments mounted an ar- gument that because Berkshire had a regulatory obligation to conduct an investigation into the complaint, as mandated by MFDA’s regulations and rules, Berkshire was consequently precluded from claiming litigation privilege over information created or collected as a result or in the course of that investigative process. 38 In my view, the argument of the plaintiff in Berkshire Investments — based on Berkshire’s obligation under MFDA’s regulations and rules — is analogous to that of the Ministry in the present application before me, which is that Suncor’s investigation is a statutory requirement (mandated by the OHS Act), and as such, Suncor cannot claim that the investigation was carried out for litigation purpose. 39 In his decision, Goepel J held in Berkshire Investments that, from the evidence before the court, it was clear that after the first investor’s com- plaint, Berkshire commenced a detailed investigation into the activities of its agent, carried out the investigation with the assistance and guidance of legal counsel, and produced many documents in the course of the in- vestigation. Consequently, he found that the dominant purpose for the production of the documents was “the pending litigation, both civil and regulatory”: Ibid at para 67. Alberta v. Suncor Energy Inc Don J. Manderscheid J. 93

40 Significantly, Goepel J further stated (para 68): In making this finding, I have not overlooked that Berkshire had an obligation [under MFDA’s rules and regulations] to the MFDA to report and investigate complaints. That obligation cannot be viewed in isolation. Berkshire’s obligations to the MFDA were part of an integrated regulatory regime that exposed Berkshire to significant sanctions for misconduct. Berkshire’s reports were the first step in a procedure which could ultimately lead to huge fines or suspensions. Berkshire’s “zone of privacy” extends to its MFDA reporting re- quirements. If it were otherwise, a litigant like Berkshire with report- ing requirements to a third party [i.e. the MFDA], would rarely be entitled to claim litigation privilege and would be seriously prejudice[d] in defending itself against civil and regulatory claims. Such a result would not be consistent with the rationale for litigation privilege [Emphasis added]. 41 Goepel J went on to clearly conclude that “the documents Berkshire [produced] as part of its investigation, are protected by litigation privi- lege. Those documents are sheltered by a ‘zone of privacy’ and need not be produced”: Berkshire Investments at para 71. 42 I agree with the opinion in Berkshire Investments. 43 It is vitally important to note that, first, in Berkshire Investments, MFDA as the regulatory body for Berkshire did not ask Berkshire to dis- close documents and information it claimed legal privilege over; rather it simply accepted the reports presented by Berkshire “in the expectation it would be held in confidence and under no expectation it would be re- quired to be produced in civil litigation” (para 38). Second, the argument of the plaintiff, that Berkshire was not entitled to litigation privilege over some records produced in the process of an investigation mandated by the MFDA regulations and rules, was rejected by the BC Supreme Court. 44 Based on the analogy that the rules and regulations of the MFDA re- quiring investigation are mandatory for Berkshire in the same manner that the provisions of the OHS Act, s 18 requiring investigation are mandatory for Suncor, I adopt the reasoning and conclusion of the BC Supreme Court in Berkshire Investments that the fact that a single inves- tigation has a dual purpose — regulatory and litigation — does not ipso facto extinguish nor abrogate a claimant’s right to legal privilege, where the claimant has been able to establish that the dominant purpose for con- ducting the investigation was in contemplation of litigation. 94 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

45 In my opinion, the legal principle that emerges from the decision in Berkshire Investments is that although Suncor has a statutory obliga- tion under the OHS Act to conduct an investigation and prepare a report on the Accident for the Ministry/OHS, that obligation does not foreclose or preclude Suncor’s entitlement to litigation privilege for all purposes, particularly if the evidence demonstrates that Suncor had taken deliberate steps to cloak documents and information collected in the process of the investigation with the garb of privilege in anticipation or contemplation of litigation. 46 Denying Suncor its entitlement to claim litigation privilege over in- formation created and/or collected during an investigation, because of an overlapping statutory obligation to investigate and report, would prejudice Suncor’s right to defend itself against any potential civil ac- tions, criminal prosecutions or regulatory claims. That result would de- feat the policy justification and purpose of the law in relation to litigation privilege: Blank at para 28; Berkshire Investments at para 68. 47 My conclusion above is also supported by the decision of the British Columbia Court of Appeal in Raj v. Khosravi, 2015 BCCA 49 (B.C. C.A.) at paras 16-17, where Smith JA, for a unanimous Court held that: [16] In applying [the “dominant purpose” test], it must be recognized that any particular document may have more than one purpose. When a document is produced for dual or multiple purposes, one of them being litigation, and none of the purposes are dominant, the docu- ment should be disclosed. ... [17] A claim of privilege will succeed when a party can establish that a document produced for dual or multiple purposes, one of them be- ing litigation, was produced for the dominant purpose of litigation. [Emphasis added]. 48 Therefore, I conclude that, if Suncor establishes that the dominant purpose of conducting the subject investigation was in contemplation of litigation, it would be entitled to claim litigation privilege over the docu- ments and other records created or collected during the internal investi- gation, notwithstanding the statutory obligations under the OHS Act, s 18. 49 Thus, the next inquiry is to evaluate whether, in the circumstances of the matter before me in this application, Suncor has established that the information, documents and records collected or created during the inter- nal investigation was produced for the dominant purpose of litigation? Alberta v. Suncor Energy Inc Don J. Manderscheid J. 95

Issue II: Are the documents and other records created or collected during Suncor’s internal investigation privileged? Ministry’s position 50 As indicated earlier, the Ministry rejected Suncor’s assertion of privi- lege in a letter written to Suncor on December 4, 2015. In that letter OHS indicated that: This information was collected by [Suncor] in order to meet its statu- tory obligation under s. 18(3) of the Occupational Health and Safety Act.... As the investigation was mandatory under the statute, the dom- inant purpose for the collection of the information was to meet that statutory requirement, not preparing for litigation [Emphasis added]. 51 Further, the Ministry submits that legal privilege — including litiga- tion privilege and solicitor-client privilege — applies to communications, and does not extend to existing facts: S. (T.), Re, 2013 ABPC 309 (Alta. Prov. Ct.) at para 73. 52 It argues that photographs, witness statements and notes taken in the context of an accident investigation are “fruits of an investigation”: R. v. Trang, 2002 ABQB 390 (Alta. Q.B.) at paras 12, 14, (2002), 315 A.R. 306 (Alta. Q.B.) [Trang]. The mere incorporation of Suncor’s photo- graphs, notes and witness statements and other relevant facts into privi- leged communications with its legal counsel does not make those records privileged: Ibid at paras 14-16. 53 OHS contends that it is impossible to “tell from the information pro- vided by Suncor whether litigation privilege has been established”: OHS’s Brief, para 76.

Suncor’s position 54 Suncor submits that the dominant purpose for undertaking investiga- tion into the Accident was in contemplation of litigation and in order for legal counsel to provide legal advice. In his questioning, Mr. Chell, Sun- cor’s legal counsel, confirmed that the “internal investigation requested [was] dual fold.” He stated that: One of the reasons is to be able to provide legal advice in respect of the incident, as well as in respect of the potential for future incidents. [And] there is also the litigation component, preparing effectively for the possibility that enforcement or sanctions are issued against the company [Transcript, 38/20-31]. 96 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

55 In support of its position, Suncor points to the evidentiary record before this Court, which indicates that a fatality had occurred at one of its sites, and its legal counsel undertook various steps to establish and assert legal advice and litigation privilege over its investigation. Suncor notes that within “a few hours of the Accident occurring,” its legal counsel requested a privileged and confidential investigation based on his assess- ment that “litigation was a real and distinct possibility given the serious- ness of the Accident, the potential for various penalties and sanctions under the OHS Act, and the fact that accident was being investigated by the RCMP and OHS Officers”: Suncor’s Brief, para 72. 56 Suncor compares the process it followed in conducting its investiga- tion with other cases where the courts have determined that privilege ex- isted: TransAlta; R. v. Bruce Power Inc., 2009 ONCA 573, 98 O.R. (3d) 272 (Ont. C.A.) [Bruce Power]; and Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co., 1988 ABCA 282, 90 A.R. 323 (Alta. C.A.). Suncor emphasizes that it tracked and adhered strictly to the protocol adopted in Bruce Power, being a case that involved an Occupational and Safety matter in Ontario. 57 Suncor contends that the only evidence before this Court regarding the dominant purpose of Suncor’s investigation is that of Mr. Chell, as the Ministry has neither provided any evidence to contradict Mr. Chell’s evidence nor successfully challenged Mr. Chell’s evidence on questioning. 58 Finally, Suncor argues that while facts are not subject to claims of privilege, summaries or analysis of facts are privileged: Kusumoto, Re, 2006 ABASC 1680 at para 31 (WL). In this case, Suncor maintains, it is not claiming privilege over facts, but claims privilege over the docu- ments created and collected as part of its investigation. Suncor observes that, contrary to the Ministry’s representation of the decision in Trang, that case stands for the principle that “a client, when asked a factual question, may not refuse to disclose any relevant fact within his knowl- edge merely because he incorporated a statement of such fact into his communication to his attorney”: Suncor’s Brief, para 101, citing Trang at para 15.

Analysis 59 The established legal test stipulates that a document is subject to liti- gation privilege if: (a) the document was made specifically with existing or contemplated litigation in mind, and, (b) the dominant purpose for its Alberta v. Suncor Energy Inc Don J. Manderscheid J. 97

creation was to assist in that litigation: Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 4th ed (Toronto: LexisNexis, 2014) at 990. 60 In Talisman Energy Inc. v. Flo-Dynamics Systems Inc., 2015 ABQB 561 (Alta. Q.B.) at paras11-12 [Talisman Energy], Master Prowse held that where a claimant asserts litigation privilege over documents created during an investigation, the filing of affidavit evidence in support of its claim to privilege that the dominant purpose of the investigation was to assist in a contemplated litigation would suffice for the purpose of dis- charging the onus on the claimant to establish that “potential litigation was the dominant purpose for the investigation.” He concludes: It is not necessary for [the claimant] to prove the negative. In other words, [the claimant] does not have to create a list of other possible motivations for the investigation and then disprove each such alterna- tive motivation. It is up to the respondents, in challenging [sworn] assertions regarding anticipated litigation, to cross-examine [the claimant’s] deponent, or through other means, to bring forward evi- dence challenging [the claimant’s] assertion [Emphasis added]. 61 The majority of the Court of Appeal in Hatch Ltd. v. Factory Mutual Insurance Co., 2015 NSCA 60 (N.S. C.A.) at para 7 [Hatch Ltd], also held that the motions judge was entitled to consider the affidavit evidence before her in determining whether litigation was the dominant purpose for preparing the impugned documents. 62 In Raj v. Khosravi, 2015 BCCA 49 (B.C. C.A.) at paras 15-18, the British Columbia Court of Appeal held that: [15] This Court adopted the dominant purpose test in Voth Brothers Construction (1974) Ltd. v. North School District 44 Board of School Trustees (1981), 29 B.C.L.R. 114 (C.A.) at 117. [17] There is no absolute rule for determining whether litigation was the dominant purpose for the document’s production ([Hamalainen (Committee of) v Sippola (1991), 62 BCLR (2d) 254 (BC CA)] at para. 25). A finding of dominant purpose involves an individualized inquiry as to whether, and if so when, the focus of the investiga- tion/inquiry shifted to litigation. This is a factual determination to be made based on all of the circumstances and the context in which the document was produced. As Wood J.A. explained in Hamalainen: [24] ...[T]here is a continuum which begins with the inci- dent giving rise to the claim and during which the focus of the inquiry changes. At what point the dominant pur- 98 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

pose becomes that of furthering the course of litigation will necessarily fall to be determined by the facts peculiar to each case. [Emphasis added.] [18] ... It may occur while other investigations are being conducted and other documents are being produced with respect to related mat- ters that are not for the dominant purpose of litigation. There is no legal requirement that every potential or conceivable purpose for the creation of a document must be negatived before it can be found that the document was produced for the dominant purpose of litigation. [Emphasis in Original]. 63 Turning to the present matter, it is compelling that, for the purpose of discharging Suncor’s onus as a claimant, its legal counsel, Mr. Chell, deposed to Affidavit evidence, which is based on his personal knowl- edge. That Affidavit stated, inter alia: 6. On Sunday, April 20, 2014 ... I received a telephone message from the [VP Legal Affairs — Operations] with Suncor [and] I immedi- ately telephoned him... 7. [The VP Legal Affairs — Operations] advised me he had already spoken to representatives from Suncor’s environmental health and safety group and requested a privileged and confidential investigation be commenced. He had reached the conclusion litigation was a real and distinct possibility and that a thorough internal investigation, which would be privileged and confidential, would be needed to pro- vide Suncor with the necessary information required to provide proper and fulsome legal advice concerning the Accident and in an- ticipation of, or in contemplation of, potential litigation that could be brought against Suncor. Some of the important factors leading to this conclusion included the seriousness of the accident, the potential for various penalties and sanctions under the Occupational Health and Safety Act (“OHS Act”), and the fact that the accident was being in- vestigated by the RCMP and Alberta Occupational Health and Safety Officers (“OHS Officers”). I agreed with [VP Legal Affairs’] assess- ment as it was reasonable in the circumstances for Suncor to antici- pate litigation, seek legal advice and assert privilege over its investigations. 8. The kind of litigation anticipated primarily involved charges under the Alberta OHS Act which would be quasi-criminal in nature.... In addition, penalties imposed against Suncor could be substantial, and while it was early, we were not in a position to rule out the possibil- ity of charges under the Criminal Code or civil litigation arising from the Accident. Alberta v. Suncor Energy Inc Don J. Manderscheid J. 99

9. As a result of our assessment of the information available regard- ing the Accident, on April 20, 2014 at 3:34 pm, in my capacity as legal counsel for Suncor, I sent an email to certain employees of Sun- cor’s environment, health and safety group confirming Legal Affair’s request that they undertake an investigation into the incident and ad- vising them of the purpose of the investigation and the protocols to be followed for the purposes of their investigation. 10. This email communication from me clearly recited the investiga- tion’s privileged nature, its confidential character and that litigation was under contemplation at that time. ... 12. My email communication included a direction that the internal investigation team members were required to conduct themselves in accordance with [the attached] rules of engagement... See, Chell’s Affidavit, paras 7-10, 12. 64 I accept the affidavit evidence of Mr. Chell that outlined the circum- stances under which Suncor anticipated the possibility of litigation. The courts have confirmed that affidavit evidence could be validly considered and relied upon to substantiate privilege claims, especially where the sworn evidence and facts are uncontroverted: Hatch Ltd at para 7; and Opron Construction Co. v. Alberta, 1989 ABCA 279 (Alta. C.A.) at pa- ras 8, 15, (1989), 100 A.R. 58 (Alta. C.A.). 65 The facts to which Mr. Chell deposed in his Affidavit, in my view, objectively support the conclusion that, in the circumstances — i.e. of the seriousness of the fatal Accident, the potential for various penalties and sanctions under the OHS Act, the RCMP investigation, and the OHS Of- ficers’ investigation — it was reasonable for Suncor to have anticipated or contemplated that there was a very good chance that litigation is possi- ble, including the likelihood of regulatory prosecution by the OHS, lay- ing of Criminal Code charges, or civil litigation. 66 Further, my assessment of the Affidavit of Mr. Feagan (on behalf of the Applicant Ministry) reveals that the evidence contained therein does not contest or contradict the fact that Mr. Chell (on behalf of the Respon- dent Suncor) took the steps he deposed to in his affidavit as actions car- ried out in contemplation of litigation. In this regard, the law is clear that it is not the responsibility of Suncor to disprove alternative motivations; instead, it is the onus of the Ministry or OHS to challenge sworn “asser- tions regarding anticipated litigation, to cross-examine [the claimant’s] deponent, or through other means, to bring forward evidence challeng- ing”: Talisman Energy at paras 11-12. The Ministry has not met its onus 100 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

in this case, as there was no basis in fact advanced by the Ministry to contradict Mr. Chell in order to show that the privilege was not properly claimed by Suncor: Blood Tribe Department of Health v. Canada (Privacy Commissioner), 2008 SCC 44 (S.C.C.) at para 16, [2008] 2 S.C.R. 574 (S.C.C.) [Blood Tribe]. 67 Consequently, I find that the Ministry has failed to demonstrate in a satisfactory manner that Suncor did not carry out its internal investiga- tion in contemplation of litigation. 68 Based on the uncontroverted affidavit evidence of Mr. Chell, I find that, in the circumstances of the Accident and the course of actions un- dertaken by Suncor’s legal counsel — beginning on the same day the Ac- cident occurred — the dominant purpose for Suncor’s conduct of the subject investigation into the Accident was in contemplation of litigation. This finding invariably and logically leads to the collateral finding that, within the context of Suncor’s internal investigation that was carried out in anticipation of litigation, the information and documents created and/or collected during the internal investigation with the dominant pur- pose that they would assist in the contemplated litigation, are integrally covered by litigation privilege. 69 Interestingly, the OHS subsequently indicated to Suncor that it re- quired the requested information as the deadline for prosecution was fast approaching: Chell’s Affidavit, para 37(e). Although that development was later in time — and as such not directly relevant to the initial forma- tion of Suncor’s anticipatory opinion that the OHS might explore regula- tory prosecution — it serves, in hindsight, to confirm the reasonableness of Suncor’s perception that there existed a real probability of prosecution by the OHS at the time Suncor formed its opinion contemplating litigation. 70 Additionally, it seems to me that the provisions of the OHS Act, ss 18(3)(b) & (c) is straightforward in its simple, but strict, requirement that obliged Suncor to “prepare a report” and “ensure that a copy of the report is readily available for inspection by an [OHS] officer.” On the face of things, these legislative provisions neither contemplated nor expressly authorized access to the individual author(s) of the statutory report for an account of the process adopted in writing the report, excepting where as an individual s/he was “present at an accident when it occurred or [has] information relating to the accident”: OHS Act, s 19(2). This opinion is reinforced by the fact that the OHS, in the context of this particular Acci- dent, also: (i) has the broad statutory power under the OHS Act, s 19 to Alberta v. Suncor Energy Inc Don J. Manderscheid J. 101

conduct an independent investigation into the Accident, (ii) had the op- portunity to commence its investigation of the Accident on exactly the same day as Suncor on April 20, 2014, and (iii) over the subsequent months, was able to interview approximately 15 witnesses regarding the Accident. 71 Further, it seems to me that the “limited use immunity” provisions in the OHS Act, ss 18(5) & 19(5) are also indicative of the legislature’s intent to extend some form of privilege to the investigation conducted by Suncor and the statutory report prepared through that process. In my view, the denial of litigation privilege to Suncor over information ob- tained through the same investigation that essentially underpinned the section 18 statutory report, would fly in the face of the legislature’s in- tention to make that statutory report inadmissible “as evidence for any purpose in a trial arising out of the serious injury or accident, an investi- gation or public inquiry under the Fatality Inquiries Act or any other ac- tion as defined in the Alberta Evidence Act except in a prosecution for perjury or for the giving of contradictory evidence” (OHS Act, s 18(5)). 72 In the end result, I find that Suncor has established that the dominant purpose of carrying out its internal investigation was in contemplation of litigation. The net effect of this finding is that information, documents and records produced for the dominant purpose of supporting the con- templated litigation, and collected during the internal investigation, are also covered by litigation privilege. 73 In terms of the distinction between “fact” and “communication,” I do note that the Supreme Court of Canada in Maranda c. Qu´ebec (Juge de la Cour du Qu´ebec), 2003 SCC 67 (S.C.C.) at para 31, [2003] 3 S.C.R. 193 (S.C.C.), admonished courts to be alert to “the fineness of that dis- tinction and the risk of eroding privilege that is inherent in using it.” Specifically, the Supreme Court concluded that “[t]he distinction be- tween “fact” and “communication” is often a difficult one and the courts should be wary of drawing the line too fine lest the privilege be seriously emasculated,” referencing John Sopinka, Sidney N Lederman and Alan W Bryant, The Law of Evidence in Canada, 2nd ed (Toronto: But- terworths, 1999) at 734, §14.53. See also, Universal Sales Ltd. v. Edinburgh Assurance Co., 2009 FC 151 (F.C.) at paras 20-21, (2009), 341 F.T.R. 185 (Eng.) (F.C.). 74 This Court is equally alert to the principle that “where a lawyer exer- cising legal knowledge, skill, judgment and industry has assembled a col- lection of relevant copy documents for his brief for the purpose of advis- 102 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

ing on or conducting anticipated or pending litigation he is entitled, indeed required, unless the client consents, to claim privilege for such collection and to refuse production”: Blank at para 62, 64; College of Physicians of BC at para 54. 75 Based on the legal principles outlined in the preceding paragraphs, the identification and separation of what constitute “facts” as distinctive from “communications,” in the context of the within proceeding, would be addressed by this Court in the manner determined below in Issue III. 76 I will now turn to consider Issue III.

Issue III: Has Suncor provided sufficient justification for its claims to legal privilege regarding the Refused Information? Ministry’s position 77 The Ministry submits that it has requested the Refused Information, collected during the investigation that Suncor conducted after the Acci- dent, pursuant to the OHS Act, s 19. A bare and blanket claim of litiga- tion privilege or solicitor-client privilege by Suncor could not exclude the provision of information relating to the circumstances and cause(s) of the Accident or the corrective action undertaken by Suncor to prevent a re-occurrence. Specific evidence, and not general statements that all doc- uments were prepared for the dominant purpose of litigation, must be provided to substantiate privilege claims: TransAlta Corp. v. Alberta (Market Surveillance Administrator), 2015 ABQB 180 (Alta. Q.B.) at para 45. The Ministry contends that Mr. Chell’s affidavit evidence has failed to substantiate Suncor’s privilege claims. It remains unclear from his affidavit and Questioning-on-Affidavit whether Mr. Chell was pro- viding legal advice or was acting as an investigator while providing di- rections to various individuals within Suncor: Transcript, 7/1-26) 78 The Ministry argues that the list of records provided by Suncor con- tain very limited detail, and in all instances contained generic descrip- tions of the items, the author and recipient: OHS’s Brief, para 22. Thus, OHS seeks better and sufficient information respecting Suncor’s privi- lege claims, and particularity regarding some individually itemized docu- ments “in the same way as would be expected in a civil litigation [when litigants] express themselves in an affidavit of records as to what they were claiming privilege over and why”: Transcript, 5/34-39. The un- sworn descriptions contained in the lists of documents provided by Sun- cor on March 3, 2016 are not evidence or sufficient substantiation of Suncor’s claims. Alberta v. Suncor Energy Inc Don J. Manderscheid J. 103

79 OHS contends that Suncor bears the onus of demonstrating the valid- ity of its privilege claims. And to discharge that onus, Suncor must: (i) itemize the records over which it claims privilege; (ii) “provide a suffi- ciently particularized description of each such record to enable proper consideration of the privileges claimed, including at least in this case: (a) the date and time each record was created; (b) the sender/author and re- cipient/addressee of each record; (c) the subject matter of the record; and (iii) identify the nature of privilege being claimed for each record and the basis for the privilege claimed”: OHS’s Brief at paras 48-50. 80 The Ministry says that the information provided by Suncor to date regarding solicitor-client privilege is insufficient to enable OHS to assess whether: (a) a client has sought legal advice from a lawyer, (b) the law- yer has provided legal advice in a professional capacity, (c) the commu- nications between the client and lawyer relate to legal advice, and (d) the communications were made in confidence: R. v. McClure, 2001 SCC 14 (S.C.C.) at para 36, [2001] 1 S.C.R. 445 (S.C.C.) [McClure]. 81 In terms of litigation privilege, the Ministry submits that, from the information provided by Suncor, it is impossible to identify “when many documents were created, by whom, or for what purpose”: OHS’s Brief at para 76. In sum, from the Ministry’s perspective, the issue in this appli- cation is: Whether Suncor has properly substantiated its claims to privi- lege, and whether that information is not producible to the Ministry, pur- suant to the accident?: Transcript, 4/1-3.

Suncor’s position 82 Suncor says that the Ministry has been unable to articulate the details about what information is missing in the records it had already produced. It seeks details of what would enable OHS to “understand the circum- stances of the accident that would be in possession of Suncor, other than the privileged records”: Suncor’s Brief, para 12. 83 Suncor maintains that the law permits it to bundle and categorize records, as “bundling can be helpful [in avoiding] the necessity of having to describe each record individually”: Canadian Natural Resources Ltd. v. ShawCor Ltd., 2014 ABCA 289 (Alta. C.A.) at paras 8-9, 48, (2014), 580 A.R. 265 (Alta. C.A.) [CNRL]. The listings provided to the OHS, Suncor argues, meet the test prescribed in case law and was responsive to the Ministry’s request for “sufficient description [that] include the type of record, the date and time it was created, the sender/author and recipi- ent/addressee, and the subject matter”: see, Feagan’s Affidavit, Exh ‘P.’ 104 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

84 Suncor submits that the list of documents “assigned a number to each record, included the dates on which the records in question were created (where such dates were available, and where not available indicated the record was created post-incident), the nature of the record, title/role of the author/recipients as applicable, the type of legal privilege(s) claimed over each record, and a brief description of the basis for the claims of legal privilege(s)”: Suncor’s Brief, para 78. Suncor explains that it bun- dled the records into six categories, and provided the descriptions of the subject matter and examples of the type of information contained within each category. 85 In Suncor’s view, if it provides more details or descriptions it “risks inadvertent disclosure of privileged information.” The Alberta Court of Appeal has held that “the obligation to provide sufficient information to indicate how a record fits within the claimed privilege does not require a degree of particularity that would defeat the privilege”: CNRL at para 56; Dorchak v. Krupka, 1997 ABCA 89 (Alta. C.A.) at para 36, (1997), 196 A.R. 81 (Alta. C.A.) [Dorchak]. Suncor contends that it would suffer prejudice if its privileged communications are shared with the OHS: R. v. Bruce Power Inc., 2009 ONCA 573 (Ont. C.A.) at paras 48-49, (2009), 98 O.R. (3d) 272 (Ont. C.A.) [Bruce Power]. 86 Suncor submits that it has discharged its onus to establish that the documents are privileged. The Affidavit of Mr. Chell, which has not been contradicted explained the context and circumstances of how the investigation was conducted, as well as how the documents were created. As a claimant, Suncor is not required to prove a negative; and as such, the onus shifts on the Ministry to disprove Suncor’s assertion and, based on facts, “show that the privilege was not properly claimed”: Blood Tribe at para 16; Talisman Energy at para 12.

Analysis 87 The core question, at this point, relates to the sufficiency of Suncor’s grounds for claiming legal privilege over each of the Refused Informa- tion, and whether Suncor has satisfactorily explained that it should not disclose the Refused Information. This issue engages the question of whether Suncor has described the Refused Information sufficiently to OHS in a manner that would enable OHS to determine that Suncor is not required to disclose the information. 88 In other words, has Suncor established that the Refused Information are either created for the dominant purpose of supporting the litigation it Alberta v. Suncor Energy Inc Don J. Manderscheid J. 105

contemplated (litigation privilege) or created in the process of communi- cations between Suncor and its solicitors (solicitor-client privilege)?

Solicitor-client privilege 89 On the issue of solicitor-client privilege, the uncontroverted affidavit evidence of Mr. Chell demonstrates that: 15. On April 20, 2014, I also contacted David G. Myrol, Barrister and Solicitor, of McLennan Ross LLP, for the purposes of retaining his firm to assist with providing legal advice arising from the Acci- dent and to defend Suncor in the event OHS charges were laid against Suncor. Mr. Myrol is an experienced defence lawyer in OHS matters and Suncor retained him to supplement the legal advice I was providing. Throughout the course of the investigation, Mr. Myrol and I provided Suncor with legal advice and direction in respect of the Accident. ... 17. On April 23, 2014 an in-person meeting with all internal investi- gation team members was held [at] Suncor’s Oilsands operations, near Fort McMurray. I attended this meeting and spent the first half- hour reviewing why the investigation was privileged and confiden- tial, as well as reiterating the protocols that needed to be followed to ensure privilege is not waived. 18. I, as legal counsel employed by Suncor, had a high degree of involvement and oversight in the investigation, which included at- tending most of the investigation team meetings, as well as regular debriefings and updates to management. ... 21. Legal advice was given to both the investigation team throughout the investigation process, as well as to senior management in relation to the findings of the internal investigation team. 22. The legal advice of external counsel was also sought and pro- vided frequently during the course of the investigation. 23. ...The purpose of the internal investigation was to gather the nec- essary facts, as litigation was reasonably contemplated, to allow legal counsel to provide legal advice to Suncor. 90 Based on the evidence of Mr. Chell, as excerpted in the preceding paragraph, I find that Suncor has demonstrated that it sought legal advice from both its internal and external lawyers, who provided legal advice, in their professional capacities, to Suncor. On the same basis, I find that there were certainly communications between Suncor, through its inter- 106 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

nal legal counsel, and Suncor’s external lawyer in relation to legal advice regarding the fatal Accident as well as its investigation, and that these communications were made in confidence: McClure at para 36. 91 What is unclear at this point is the scope of the communications — including the records created in the process — between Suncor and its lawyers. However, in this respect, the law is clear that Suncor’s obliga- tion to provide sufficient information indicating how a record fits within the claimed privilege does not require a degree of particularity that would, itself, defeat the privilege: CNRL at para 56; Dorchak at para 36. 92 Accordingly, given the volume of the materials over which Suncor claims solicitor-client privilege and refused to produce, the assessment of which particular documents or records were created during these periods of confidential communications between Suncor and its solicitors is di- rected to the Court of Queen’s Bench Case Management Counsel, to act as referee [“Referee”]. In this capacity, the Referee would determine and set the process for conducting the initial assessment and identification of the records, documents and information regarding the Accident in terms of whether Suncor can or cannot claim solicitor-client privilege. Follow- ing such assessment, the Referee will make recommendations for this Court to consider and approve as to which of the records, documents and information regarding the Accident are covered by solicitor-client privilege.

Litigation privilege 93 On the issue of litigation privilege, I had earlier concluded that, not- withstanding the statutory requirement of an investigation under the OHS Act, s 18, Suncor has established that the dominant purpose of carrying out its internal investigation was in contemplation of litigation; and that the information, documents and records created for the dominant purpose of supporting the contemplated litigation, which were collected during the internal investigation, are also covered by litigation privilege. 94 The outstanding issue regarding Suncor’s claim of litigation privilege is the determination of which particular records, documents or informa- tion were created for the dominant purpose of supporting the contem- plated litigation, and collected as such during the internal investigation. 95 Similarly, because of the volume of materials over which Suncor has claimed litigation privilege, the assessment of which particular records, documents or information fall into the litigation privilege category, as claimed by Suncor, is directed to the Referee, and to follow the same Alberta v. Suncor Energy Inc Don J. Manderscheid J. 107

procedure as outlined above in paragraph 92 of this Decision, regarding Suncor’s ability to claim solicitor-client privilege. Thus, the Referee would have the authority to determine and set the process for conducting the initial assessment as well as identification of all records, documents and information regarding the Accident that are covered by litigation privilege. Subsequently, the Referee will make recommendations to this Court for its consideration and approval. 96 These steps are necessary from the perspectives of judicial economy and avoidance of prejudice to the party claiming legal privilege. In Bruce Power at para 48, the Ontario Court of Appeal succinctly captured how, in an adversarial litigation, prejudice and disadvantage may result to a party claiming legal privilege where the opposing party has been unjusti- fiably afforded the opportunity of reviewing a potentially privileged in- formation. Armstrong JA, for a unanimous ONCA, observed: [I]t would be difficult, if not impossible, for a witness who has read the report to erase its contents from his or her consciousness. Moreo- ver, it would be difficult, if not impossible, for the court to determine what effect the report may have had on a witness’s testimony and whether the prosecutor’s strategy has been indirectly, at least, af- fected by his witnesses having read the report. In the circumstances of the present application, I cannot agree more with Armstrong JA’s statement.

Disposition 97 In the end result, I direct that within 30 days of the release of this Decision, Suncor meet with the Referee who shall act as referee vested with the authority to determine and set the process for the conduct of the directed assessment. Accordingly, Suncor shall provide the Refused In- formation to the Referee and identify which records, information and communications it claims are either covered by litigation privilege or so- licitor-client privilege. Suncor shall then, in accordance with the process determined and set by the Referee, provide written and/or oral submis- sions, in a hearing as required, to the Referee explaining the evidentiary basis for such claims to the Referee. Subsequently, the Referee will make recommendations to this Court for its consideration and approval. 98 In this way, prejudice to Suncor, which might otherwise result where/if the Ministry is permitted to review the contents of Suncor’s Re- fused Information in detail, would be avoided. Application adjourned on terms. 108 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[Indexed as: Wolfe v. Shawcor Ltd.] Donald Wolfe, Composite Technologies Inc., Proflex Pipe Corporation, Appellants/Plaintiffs and Shawcor Ltd., Flexpipe Systems Inc., Sam Bouey, Kevin Gartner, ARC Financial Corporation and David Budney, Respondents/Defendants Alberta Court of Queen’s Bench Docket: Edmonton 0803-11571 2016 ABQB 261 S.D. Hillier J. Heard: March 16, 2016 Judgment: May 6, 2016 Civil practice and procedure –––– Disposition without trial — Stay or dis- missal of action — Grounds — Lack of capacity to sue or be sued –––– Plain- tiffs DW, C Inc. and P Corp. claimed to have developed certain technology that defendants used, along with confidential information, to make their product — Plaintiffs brought action against defendants for breach of confidentiality agree- ments, wrongful use of confidential information, unlawful or intentional inter- ference with economic relations, breach of fiduciary duties and unjust enrich- ment — Master granted defendants’ motion for summary judgment dismissing action on basis that none of plaintiffs had right to sue — Master held that P Corp.’s claim was abuse of process and nullity, as it was non-entity after being dissolved by registrar, and was incapable of revival as more than five years had passed — Master held that C Inc. had assigned its interest in technology to P Corp. pursuant to technology transfer agreement, so it was not owner and could not maintain any claims — Master held that DW was shareholder and had no separate right to advance cause of action — Plaintiffs appealed — Appeal dis- missed — Master correctly determined that status of P Corp. rendered its own claim nullity, as dissolved corporation lacked capacity to sue — Master cor- rectly concluded that claims should not be stayed pending possible future legis- lative developments regarding revival of corporations, considering legislature had clearly expressed period within which right of revival must be exercised — Master was correct in his conclusion that P Corp. owned technology after C Inc. transferred its interest in technology to P Corp. under agreement — There was no evidence that C Inc. had taken any steps to make claim under Unclaimed Personal Property and Vested Property Act — DW and C Inc. did not assert any personal damages that were not linked to their shareholder interests, so their assertions of separate breaches of confidentiality were without merit. Wolfe v. Shawcor Ltd. 109

Business associations –––– Changes to corporate status — Loss of corporate status — Dissolution — Property of dissolved corporation –––– Plaintiffs DW, C Inc. and P Corp. claimed to have developed certain technology that de- fendants used, along with confidential information, to make their product — Plaintiffs brought action against defendants for breach of confidentiality agree- ments, wrongful use of confidential information, unlawful or intentional inter- ference with economic relations, breach of fiduciary duties and unjust enrich- ment — Master granted defendants’ motion for summary judgment dismissing action on basis that none of plaintiffs had right to sue — Master held that P Corp.’s claim was abuse of process and nullity, as it was non-entity after being dissolved by registrar, and was incapable of revival as more than five years had passed — Master held that C Inc. had assigned its interest in technology to P Corp. pursuant to technology transfer agreement, so it was not owner and could not maintain any claims — Master held that DW was shareholder and had no separate right to advance cause of action — Plaintiffs appealed — Appeal dis- missed — Master correctly determined that status of P Corp. rendered its own claim nullity, as dissolved corporation lacked capacity to sue — Master was cor- rect in his conclusion that P Corp. owned technology after C Inc. transferred its interest in technology to P Corp. under agreement — There was no evidence that P Corp.’s affairs were properly wound up so as to allow shareholders, including C Inc., to claim entitlement to intellectual property — By virtue of s. 229 of Business Corporations Act (BCA) and s. 15 of Unclaimed Personal Property and Vested Property Act (UPPVPA), corporation’s property not disposed of at date of dissolution vested in Crown, subject to s. 227 of BCA — There was no evi- dence that C Inc. had taken any steps to make claim under UPPVPA. Civil practice and procedure –––– Summary judgment — Availability of summary judgment — Miscellaneous –––– Plaintiffs DW, C Inc. and P Corp. claimed to have developed technology for manufacture of flexible composite pipe and alleged that defendants used confidential information and technology to make their product — Plaintiffs brought action against defendants S Ltd., F Inc., SB, KG, A Corp. and DB for breach of confidentiality agreements, wrongful disclosure and use of confidential information relating to technology, unlawful or intentional interference with plaintiffs’ economic relations, breach of fiduci- ary duties and unjust enrichment — Master granted defendants’ motion for sum- mary judgment dismissing action against them on basis that none of plaintiffs had right to sue — Master held that viva voce evidence was not required to properly resolve case, as there was no genuine issue of potentially decisive ma- terial fact, and concluded that it was fair and just to summarily dismiss action as abuse lacking merit within scope of R. 7.3 of Alberta Rules of Court — Plain- tiffs appealed — Appeal dismissed — Master did not err in determining that this was appropriate case for summary judgment based on status of each of plaintiffs in relation to claim — Master’s reasons were intelligible and susceptible to meaningful review — Summary dismissal was justified in circumstances. 110 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Cases considered by S.D. Hillier J.: Access Mortgage Corp. (2004) Ltd. v. Arres Capital Inc. (2014), 2014 ABCA 280, 2014 CarswellAlta 1662, [2014] A.J. No. 1032, 584 A.R. 68, 623 W.A.C. 68 (Alta. C.A.) — referred to Adolph Lumber Co. v. Meadow Creek Lumber Co. (1919), [1919] 1 W.W.R. 823, 58 S.C.R. 306, 45 D.L.R. 579, 1919 CarswellBC 24, [1919] S.C.J. No. 11 (S.C.C.) — considered Alberta (Human Rights Commission) v. Alberta Blue Cross Plan (1983), [1983] 6 W.W.R. 758, 4 C.H.R.R. D/1661, 48 A.R. 192, 1 D.L.R. (4th) 301, 4 Ad- min. L.R. 135, 84 C.L.L.C. 17,002, 28 Alta. L.R. (2d) 1, 1983 CarswellAlta 159, 1983 ABCA 207 (Alta. C.A.) — considered Bahcheli v. Yorkton Securities Inc. (2012), 2012 ABCA 166, 2012 CarswellAlta 940, 21 C.P.C. (7th) 371, 524 A.R. 382, 545 W.A.C. 382, 65 Alta. L.R. (5th) 127, [2012] A.J. No. 540, 43 Admin. L.R. (5th) 74 (Alta. C.A.) — referred to Balm v. 3512061 Canada Ltd. (2003), 2003 ABCA 98, 2003 CarswellAlta 458, 327 A.R. 149, 296 W.A.C. 149, [2003] A.J. No. 417, 14 Alta. L.R. (4th) 221 (Alta. C.A.) — referred to Bute Logging Co. v. Sanders (1952), 5 W.W.R. (N.S.) 142, 1952 CarswellBC 18, [1952] B.C.J. No. 11 (B.C. S.C.) — referred to C. (R.) v. McDougall (2008), 2008 SCC 53, 2008 CarswellBC 2041, 2008 Car- swellBC 2042, 83 B.C.L.R. (4th) 1, [2008] 11 W.W.R. 414, 60 C.C.L.T. (3d) 1, 61 C.P.C. (6th) 1, (sub nom. H. (F.) v. McDougall) 297 D.L.R. (4th) 193, [2008] S.C.J. No. 54, 61 C.R. (6th) 1, (sub nom. F.H. v. McDougall) 380 N.R. 82, (sub nom. F.H. v. McDougall) 260 B.C.A.C. 74, (sub nom. F.H. v. McDougall) 439 W.A.C. 74, (sub nom. F.H. v. McDougall) [2008] 3 S.C.R. 41, [2008] A.C.S. No. 54 (S.C.C.) — followed Cadbury Schweppes Inc. v. FBI Foods Ltd. (1999), 167 D.L.R. (4th) 577, 1999 CarswellBC 77, 1999 CarswellBC 78, 83 C.P.R. (3d) 289, 235 N.R. 30, [1999] S.C.J. No. 6, 42 B.L.R. (2d) 159, 117 B.C.A.C. 161, 191 W.A.C. 161, 59 B.C.L.R. (3d) 1, [1999] 5 W.W.R. 751, [1999] 1 S.C.R. 142, [2000] F.S.R. 491, 43 B.L.R. (2d) 159 (S.C.C.) — referred to Cie fran¸caise du Ph´enix v. Travelers Fire Insurance Co. (1952), [1952] 2 S.C.R. 190, 1952 CarswellQue 54, [1952] I.L.R. 439, [1952] S.C.J. No. 19 (S.C.C.) — considered Creston Moly Corp. v. Sattva Capital Corp. (2014), 2014 SCC 53, 2014 CSC 53, 2014 CarswellBC 2267, 2014 CarswellBC 2268, 373 D.L.R. (4th) 393, 59 B.C.L.R. (5th) 1, [2014] S.C.J. No. 53, [2014] 9 W.W.R. 427, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, (sub nom. Sattva Capital Corp. v. Creston Moly Corp.) [2014] 2 S.C.R. 633 (S.C.C.) — re- ferred to Wolfe v. Shawcor Ltd. 111

Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd. (2010), 2010 ABCA 126, 2010 CarswellAlta 746, 477 A.R. 112, [2010] A.J. No. 432, 483 W.A.C. 112, 25 Alta. L.R. (5th) 221 (Alta. C.A.) — referred to Elbow River Marketing Limited Partnership v. Canada Clean Fuels Inc. (2012), 2012 ABCA 328, 2012 CarswellAlta 1914, 1 B.L.R. (5th) 292, 69 Alta. L.R. (5th) 22, 539 A.R. 68, 561 W.A.C. 68 (Alta. C.A.) — referred to Eli Lilly & Co. v. Novopharm Ltd. (1998), 1998 CarswellNat 1061, 1998 Car- swellNat 1062, 161 D.L.R. (4th) 1, 227 N.R. 201, [1998] 2 S.C.R. 129, 152 F.T.R. 160 (note), 80 C.P.R. (3d) 321, [1998] S.C.J. No. 59, [1998] A.C.S. No. 59 (S.C.C.) — considered Ernst v. EnCana Corp. (2014), 2014 ABCA 285, 2014 CarswellAlta 1588, 85 C.E.L.R. (3d) 39, [2014] 11 W.W.R. 496, 75 Admin. L.R. (5th) 162, [2014] A.J. No. 975, 580 A.R. 341, 620 W.A.C. 341, 12 C.C.L.T. (4th) 274, 319 C.R.R. (2d) 309, 2 Alta. L.R. (6th) 293 (Alta. C.A.) — considered Foss v. Harbottle (1843), 67 E.R. 189, 2 Hare 461 (Eng. V.-C.) — considered Free Trade Medical Network Inc. v. RBC Travel Insurance Co. (2006), 2006 CarswellOnt 5503, 40 C.C.L.I. (4th) 32, 215 O.A.C. 230, [2006] O.J. No. 3636 (Ont. C.A.) — considered Gudzinski Estate v. Allianz Global Risks US Insurance Co. (2012), 2012 CarswellAlta 59, 2012 ABCA 5, 59 Alta. L.R. (5th) 195, 5 C.C.L.I. (5th) 204, 519 A.R. 215, 539 W.A.C. 215 (Alta. C.A.) — referred to Hercules Management Ltd. v. Ernst & Young (1997), 1997 CarswellMan 198, 211 N.R. 352, 115 Man. R. (2d) 241, 139 W.A.C. 241, (sub nom. Hercules Managements Ltd. v. Ernst & Young) 146 D.L.R. (4th) 577, 35 C.C.L.T. (2d) 115, [1997] S.C.J. No. 51, 31 B.L.R. (2d) 147, [1997] 2 S.C.R. 165, [1997] 8 W.W.R. 80, 1997 CarswellMan 199 (S.C.C.) — considered Hryniak v. Mauldin (2014), 2014 CarswellOnt 640, 2014 CarswellOnt 641, 37 R.P.R. (5th) 1, [2014] S.C.J. No. 7, 46 C.P.C. (7th) 217, 27 C.L.R. (4th) 1, (sub nom. Hryniak v. Mauldin) 366 D.L.R. (4th) 641, 2014 CSC 7, 453 N.R. 51, 12 C.C.E.L. (4th) 1, 314 O.A.C. 1, 95 E.T.R. (3d) 1, 21 B.L.R. (5th) 248, [2014] 1 S.C.R. 87, [2014] A.C.S. No. 7, 2014 SCC 7 (S.C.C.) — followed International Corona Resources Ltd. v. LAC Minerals Ltd. (1989), 6 R.P.R. (2d) 1, 44 B.L.R. 1, 35 E.T.R. 1, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 69 O.R. (2d) 287, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 26 C.P.R. (3d) 97, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 61 D.L.R. (4th) 14, 101 N.R. 239, 36 O.A.C. 57, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) [1989] 2 S.C.R. 574, 1989 CarswellOnt 126, 1989 CarswellOnt 965, [1989] S.C.J. No. 83, EYB 1989-67469, 69 O.R. (2d) 287 (note) (S.C.C.) — considered Kaverit Steel & Crane Ltd. v. Kone Corp. (1993), 10 Alta. L.R. (3d) 103, [1993] A.J. No. 402, 1993 CarswellAlta 14 (Alta. C.A.) — considered 112 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 2002 CarswellOnt 3380, 165 O.A.C. 147, 28 B.L.R. (3d) 163, [2002] O.J. No. 3891, 61 O.R. (3d) 786, 220 D.L.R. (4th) 611 (Ont. C.A.) — considered Murphy Oil Co. v. Predator Corp. (2006), 2006 ABCA 69, 2006 CarswellAlta 233, 55 Alta. L.R. (4th) 1, [2006] 5 W.W.R. 385, [2006] A.J. No. 207, 384 A.R. 251, 367 W.A.C. 251 (Alta. C.A.) — referred to Orr v. Fort McKay First Nation (2014), 2014 ABQB 111, 2014 CarswellAlta 312, [2014] A.J. No. 204, 587 A.R. 16, 6 Alta. L.R. (6th) 307 (Alta. Q.B.) — referred to Papaschase Indian Band No. 136 v. Canada (Attorney General) (2008), 2008 SCC 14, 2008 CarswellAlta 398, 2008 CarswellAlta 399, 86 Alta. L.R. (4th) 1, [2008] 5 W.W.R. 195, (sub nom. Lameman v. Canada (Attorney Gen- eral)) 372 N.R. 239, 68 R.P.R. (4th) 59, 292 D.L.R. (4th) 49, [2008] S.C.J. No. 14, [2008] 2 C.N.L.R. 295, (sub nom. Lameman v. Canada (Attorney General)) 429 A.R. 26, (sub nom. Lameman v. Canada (Attorney General)) 421 W.A.C. 26, (sub nom. Canada (Attorney General) v. Lameman) [2008] 1 S.C.R. 372, [2008] A.C.S. No. 14 (S.C.C.) — referred to Prudential Assurance Co. v. Newman Industries Ltd. (No. 2) (1981), [1982] Ch. 204, [1982] 1 All E.R. 354, [1982] 2 W.L.R. 31 (Eng. C.A.) — considered R.L.T.V. Investments Inc. v. Telecommunications (2009), 2009 SKCA 83, 2009 CarswellSask 483, [2009] 9 W.W.R. 15, 61 B.L.R. (4th) 37, 331 Sask. R. 78, 460 W.A.C. 78, [2009] S.J. No. 457 (Sask. C.A.) — considered Reach M.D. Inc. v. Pharmaceutical Manufacturers Assn. of Canada (2003), 2003 CarswellOnt 1944, 17 C.C.L.T. (3d) 149, 227 D.L.R. (4th) 458, 172 O.A.C. 202, 25 C.P.R. (4th) 417, 65 O.R. (3d) 30, [2003] O.J. No. 2062 (Ont. C.A.) — considered SemCanada Crude Co., Re (2010), 2010 ABQB 531, 2010 CarswellAlta 1702, 33 Alta. L.R. (5th) 245, 71 C.B.R. (5th) 176, 495 A.R. 367 (Alta. Q.B.) — referred to Sherwood Steel Ltd. v. Odyssey Construction Inc. (2014), 2014 ABCA 320, 2014 CarswellAlta 1750, 59 C.P.C. (7th) 221, [2015] 3 W.W.R. 582, 38 C.L.R. (4th) 173, 5 Alta. L.R. (6th) 268 (Alta. C.A.) — referred to U.M.W., Local 1562 v. Williams (1919), [1919] 1 W.W.R. 217, 14 Alta. L.R. 251, 45 D.L.R. 150, 1919 CarswellAlta 212 (Alta. C.A.) — referred to U.M.W., Local 1562 v. Williams (1919), 59 S.C.R. 240, [1919] 3 W.W.R. 828, 49 D.L.R. 578, 1919 CarswellAlta 179, [1919] S.C.J. No. 45 (S.C.C.) — re- ferred to University of Alberta v. Chang (2012), 2012 ABCA 324, 2012 CarswellAlta 1933, 44 Admin. L.R. (5th) 216, 71 Alta. L.R. (5th) 19, [2013] 3 W.W.R. 256, 539 A.R. 58, 561 W.A.C. 58 (Alta. C.A.) — referred to Windsor v. Canadian Pacific Railway (2014), 2014 ABCA 108, 2014 Carswell- Alta 395, [2014] 5 W.W.R. 733, 94 Alta. L.R. (5th) 301, [2014] A.J. No. Wolfe v. Shawcor Ltd. 113

256, 371 D.L.R. (4th) 339, 56 C.P.C. (7th) 107, (sub nom. Windsor v. Canadian Pacific Railway Ltd.) 572 A.R. 317, (sub nom. Windsor v. Canadian Pacific Railway Ltd.) 609 W.A.C. 317 (Alta. C.A.) — referred to 776826 Alberta Ltd. v. Ostrowercha (2015), 2015 ABCA 49, 2015 CarswellAlta 155, [2015] A.J. No. 118, (sub nom. Ostrowercha v. 776826 Alberta Ltd.) 593 A.R. 391, (sub nom. Ostrowercha v. 776826 Alberta Ltd.) 637 W.A.C. 391 (Alta. C.A.) — referred to 1036122 Alberta Ltd. v. Khurana (2012), 2012 ABCA 10, 2012 CarswellAlta 4, 93 B.L.R. (4th) 113, 57 Alta. L.R. (5th) 338, 17 C.P.C. (7th) 334, 11 C.L.R. (4th) 164, 519 A.R. 221, 539 W.A.C. 221, [2012] A.J. No. 7 (Alta. C.A.) — referred to 1214777 Alberta Ltd. v. 480955 Alberta Ltd. (2014), 2014 ABQB 301, 2014 CarswellAlta 821, [2014] A.J. No. 538 (Alta. Q.B.) — referred to Statutes considered: Business Corporations Act, R.S.A. 2000, c. B-9 s. 26(3)(c) — considered s. 208 — considered s. 227 — considered s. 229 — considered Unclaimed Personal Property and Vested Property Act, S.A. 2007, c. U-1.5 Generally — referred to s. 1(s) — considered s. 15 — considered s. 34 — considered s. 35(1) — considered s. 48 — considered s. 49 — considered Rules considered: Alberta Rules of Court, Alta. Reg. 124/2010 Generally — referred to R. 3.68 — considered R. 7.3 — considered R. 13.6(2)(b) — considered R. 13.6(3)(n) — considered R. 13.6(3)(q) — considered R. 13.6(3)(r) — considered Regulations considered: Unclaimed Personal Property and Vested Property Act, S.A. 2007, c. U-1.5 General Regulation, Alta. Reg. 104/2008 Generally — referred to s. 3 — considered 114 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

s. 4 — considered s. 22(2) — considered

APPEAL by plaintiffs from judgment reported at Wolfe v. Shawcor Ltd. (2015), 2015 ABQB 181, 2015 CarswellAlta 442, 28 Alta. L.R. (6th) 183 (Alta. Q.B.), granting defendants’ motion for summary dismissal of plaintiffs’ claim.

Patrick D. Kirwin, for Appellants, Plaintiffs James T. Neilson, Q.C., for Respondents, Defendants, Shawcor Ltd., Flexpipe Systems Inc., Sam Bouey, Kevin Gartner and David Budney Michael E. Mestinsek, for Respondent, Defendant, ARC Financial Corp.

S.D. Hillier J.: Introduction 1 This is an appeal from a Master’s decision dated March 17, 2015 (2015 ABQB 181 (Alta. Q.B.)) granting summary dismissal of the Plain- tiffs’ claim under Rule 7.3 of the Alberta Rules of Court, Alta Reg 124/2010. 2 The Appellants assert that the Master failed to consider applicable law and relevant facts and erred in concluding that the actions of each of the Plaintiffs should be summarily dismissed. They also allege that his reasons did not address the issues and evidence presented. 3 The Appeal was initially scheduled for May 6, 2015, on which date Goss J. adjourned the appeal to special chambers with leave to file fur- ther evidence on terms and with deadlines for Briefs pursuant to Civil Practice Note No. 2. However, no additional evidence was prepared and the appeal is essentially based on the record of proceedings before the Master. 4 For the following reasons, I have concluded that the Appeal should be dismissed.

Overview of the Claim 5 For the sake of brevity, I will refer to the individual parties by their last names. 6 At all material times, Wolfe was an officer and shareholder of Com- posite Technologies Inc. (CTI). He was also an officer of Proflex. CTI was majority shareholder of Proflex. 7 In their Statement of Claim filed on August 18, 2008, the Appellants Wolfe, CTI, and Proflex generally alleged against the Respondents: Wolfe v. Shawcor Ltd. S.D. Hillier J. 115

a. breach of confidentiality agreements; b. wrongful disclosure and use of confidential information related to the technology; and c. unlawful or intentional interference with the Appellants’ eco- nomic relations. 8 In addition, the specific claims against Flexpipe were that it: a. induced the Respondents Bouey, Gartner and Budney to breach their confidentiality agreements with the Appellants; b. breached their fiduciary duties to the Appellants; and c. was unjustly enriched. 9 In the Amended Statement of Claim against Shawcor, Flexpipe, Bouey and Gartner filed on September 3, 2010, and the Statement of Claim against Budney filed on March 29, 2011, they allege that: a. Shawcor, Bouey, Gartner and Budney are in breach of confidenti- ality agreements with CTI in providing to Flexpipe confidential information relating to the Plaintiffs’ Technology; b. Bouey, Gartner and Budney have breached fiduciary duties of confidentiality owed to CTI and Proflex; c. Flexpipe has induced Bouey, Gartner and Budney to provide con- fidential information in breach of their confidentiality agreements and fiduciary obligations of confidentiality owed to the Plaintiffs; d. Shawcor and Flexpipe have unlawfully or intentionally interfered with the Plaintiffs’ economic interests. 10 It is common ground that the Appellants have withdrawn allegations against named Defendant Gartner with the intention of filing a formal discontinuance in due course, and that the allegation of conspiracy has been abandoned.

Background 11 The Appellants allege that they developed a technology for the manu- facture of flexible composite pipe (the Technology). 12 Starting in 1990, some of the named Respondents, including Profes- sor Budney and Bouey, worked or consulted with the Appellants. 13 On September 28, 1990, Budney and Wolfe signed a Proprietary In- formation Disclosure Agreement. 116 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

14 Budney and Wolfe signed a replacement confidentiality agreement on September 1, 1994 for services to May 31, 1995, with specific provisions that sections 3, 4, 7, 9 and 10 were to continue upon termination: 3. to keep in confidence, to not use for his own commercial benefit and not to disclose to any person, firm or corporation, any proprie- tary information pursuant to the agreement; 4. on public disclosure such as patent protection filing, Budney may disclose proprietary information in the form of papers, reports and conference presentations; 7. graduate student thesis projects to be done by separate University agreements; 9. other testing to be by separate agreement with the Department of Mechanical Engineering; and 10. Budney to receive no other fees, shares or other ownership in the technology (beyond the specified remuneration of $1,000 per month). 15 Bouey was involved in production and testing of Proflex product that was first installed in 1995 for use as risers. He signed a confidentiality agreement dated August 24, 1994 which set out a broad description of confidential information and noted specific aspects of continuous flexible pipe not to be disclosed, including: the MPLD interlocking mechanism, the method of connection, the method of laminating thermoplastic prepreg tape in the manufacture of flexible composite pipe, specific flex- ible composite pipe material data, and transverse fibre reinforcement as relating to flexible composite pipe. 16 CTI negotiated with Shawcor and its predecessors from time to time for business investment. 17 Shawcor and CTI signed a confidentiality agreement by the terms of which all confidentiality obligations expired on August 11, 1995. 18 Budney’s formal employment relationship with CTI ended in Sep- tember 1995. Budney then worked in a variety of other capacities and took early retirement from the University in 1998. 19 Bouey’s employment was terminated by CTI in March 1996 due to lack of business. Bouey was employed from March 1996 to August 2001 by companies unrelated to the parties to this action. 20 CTI and Proflex entered into a License Agreement dated August 31, 1996, whereby Proflex acquired an exclusive license under certain pat- ents issued, pending and applied for and an exclusive right to utilize CTI’s proprietary technical information relating to equipment, processes, Wolfe v. Shawcor Ltd. S.D. Hillier J. 117

manufacturing data, market data, test data and installation data associated with those patents and applications. 21 Starting around 1998, Proflex attempted to raise equity for construc- tion of a composite pipe plant. 22 From the evidence, it appears that the Appellants had obtained U.S. patents in respect of their process between November 1993 and March 1999 with product length up to 20 meters. It also appears that some other producers including Fiberspar and Hydril developed their own patented composite flexible pipe for market, and the Appellants continued to mod- ify Proflex product to extend length and reduce costs. 23 On September 15, 1999, CTI and Proflex entered into a Technology Transfer Agreement (TTA) which replaced their 1996 License Agreement. 24 Between late 1999 and 2001, CTI engaged in negotiations for Defen- dant ARC Financial Corporation (ARC) to invest in the manufacture of flexible pipe product. ARC signed a confidentiality agreement with Proflex as to technical, financial, marketing and other information relat- ing to the product, manufacturing process or operations of Proflex for a specified term of 36 months from December 15, 1999. 25 In March 2001, ARC presented a term sheet to CTI on behalf of its investment committee. It contemplated a $10 million share subscription for construction of a plant in Alberta and for general working capital pur- poses, but nothing was finalized. 26 In the period from 2001 to 2003, Flexpipe retained Budney to help develop a spoolable flexible composite product. Budney introduced Flexpipe to Bouey who was hired in November 2001. 27 By 2003, Flexpipe had designed and patented a flexible pipe product that was spoolable in lengths of 750 to 1000 meters. That product was patented in January 2004. 28 Shawcor and CTI signed a second confidentiality agreement accord- ing to which all confidentiality obligations expired on October 10, 2004. 29 On July 2, 2006, Proflex was struck from the Corporate Registry. The corporate search of Proflex dated February 3, 2014 and attached as Ex- hibit “B” to the Affidavit of Douglas Freel indicates that CTI owned 89.3% of the shares in Proflex. It identifies six other voting shareholders with minor shareholding interests. 30 A third confidentiality agreement with Shawcor, dated December 15, 2006 and signed by Wolfe in his name but on behalf of CTI, expressed 118 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

that it applied only to documents which were marked “Confidential” and oral disclosures confirmed to be confidential within 30 days. The evi- dence discloses that no such marked documents or confirmed oral disclo- sures were identified as having been sent to Shawcor. 31 In June 2007, Wolfe advised that he had signed a licence agreement with another company for North America, which effectively put an end to discussions between Wolfe and Shawcor. 32 In addition to its negotiations with the Appellants, ARC looked at investments in other operations including Flexpipe as a start-up opera- tion. ARC acted as an advisor to certain limited partnership funds that owned shares in Flexpipe for a period of time. As a result of the success of the Flexpipe product, Shawcor acquired all of the shares of Flexpipe pursuant to a plan of arrangement approved by the court and filed on June 27, 2008. 33 Shawcor retained some relevant materials in a sealed file solely in case Shawcor needed to prove what had been provided. Shawcor stated unequivocally that the sealed file was never accessed from October 2001 to the commencement of this action in August 2008. That statement is uncontradicted. 34 Despite marked differences in the Flexpipe product, the Appellants allege that their confidential information and Technology were used to enable Flexpipe to model and manufacture their product. There is a sig- nificant factual dispute as to whether a confidential model was used to create the product, or simply engineering equations and algorithms to test and refine production.

Master’s Decision 35 The parties presented Affidavits sworn by Wolfe and Russ Agnew for the Appellants, and by Bouey, Douglas Freel, and Garry Graham for one or more of the Respondents. 36 The Defendants argued before the Master that none of the Plaintiffs had a proper cause of action. In particular: a. CTI transferred all right, title and interest in the Technology to Proflex before the action was commenced; b. Proflex was struck off the Alberta Corporate Registry and can no longer be revived; c. Wolfe is not a party to the transfer in his personal capacity and holds no personal interest as a result of the transfer; Wolfe v. Shawcor Ltd. S.D. Hillier J. 119

d. there is no evidence that any of the Defendants intended to injure the business interests of any of the Plaintiffs. 37 On review of the extensive affidavit material and written briefs, the Master concluded that the claim could not be pursued by any of the named Plaintiffs for three main reasons: a. On July 2, 2006, Proflex was struck from the Corporate Registry. This was well before the original Statement of Claim was filed in this action on August 18, 2008. It has not been, and is incapable of being revived. As a result, any and all claims advanced by Proflex in the action are a nullity, an abuse of process and without merit. b. On September 15, 1999, CTI assigned all of its right, title and in- terest in its technology for the manufacture of flexible composite pipe, including its patents and know how to Proflex. CTI has no basis on which to assert claims based on misappropriation or mis- use of the Technology. Those claims lay with Proflex, the owner of the Technology. As a result, all claims advanced by CTI cannot succeed. c. Wolfe has no claim in any personal capacity because his status as a shareholder in CTI is subsumed by the corporate entity. Since he did not commence any derivative action prior to Proflex being struck off, he too is unable in law to advance any claim against the Defendants. 38 Having reviewed of all the submissions, the Master concluded that there would be no merit in allowing this matter to proceed to trial as the non-moving party’s position has no merit, and there is no genuine issue of a potentially decisive material fact. 39 The Master expressly declined to go into the strength of the breach of confidentiality claims and other claims, noting: 4 ... The applicants rightly took the position that the issue of confi- dentiality and other claims are not in issue because that is a question of fact which would have to go to trial...

Standard on Appeal 40 The parties agree that the standard for review in these circumstances is correctness: Orr v. Fort McKay First Nation, 2014 ABQB 111, 587 A.R. 16 (Alta. Q.B.), Gudzinski Estate v. Allianz Global Risks US Insurance Co., 2012 ABCA 5, 519 A.R. 215 (Alta. C.A.), Bahcheli v. Yorkton Securities Inc., 2012 ABCA 166, 524 A.R. 382 (Alta. C.A.). 120 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

41 Reasons alleged to be insufficient are reviewable for intelligibility and a measure of meaningful review; they are not to be dissected min- utely nor out of context: University of Alberta v. Chang, 2012 ABCA 324 (Alta. C.A.) at para 23, (2012), 539 A.R. 58 (Alta. C.A.) and cases cited therein.

Issues 42 This Court must decide whether the Master correctly concluded that: 1. the status of Proflex renders its claim a nullity; 2. the claims should not be stayed pending possible future legislative developments; 3. CTI transferred all of its rights in the Technology and therefore has no standing to sue; 4. Wolfe and CTI have no independent cause of action; 5. it was fair and just to dismiss the whole of the action as an abuse lacking merit within the scope of Rule 7.3. 43 As well, the Court must determine whether the Master properly con- sidered the positions of the parties and provided adequate reasons for his decision.

Alberta Rules of Court 44 Rule 7.3 permits a party to apply to the court for summary judgment in respect of all or part of a claim on the ground that there is no merit to a claim or part of it. 45 Rule 3.68 provides that all or any part of a claim or defence may be struck out if a commencement document or pleading constitutes an abuse of process.

Analysis 1 Did the Master correctly conclude that the status of Proflex renders its own claim a nullity? 46 Proflex was struck from the Corporate Registry on July 2, 2006. Steps could have been taken for its revival within 5 years of dissolution, pursu- ant to s. 208 of Alberta’s Business Corporations Act, RSA 2000, c B-9 (ABCA). 47 The Unclaimed Personal Property and Vested Property Act (Alberta), SA 2007, c U-1.5, s. 34 (UPPVPA) also granted a right of revival for up Wolfe v. Shawcor Ltd. S.D. Hillier J. 121

to 5 years after coming into force of that legislation. In fact, the UPPVPA was proclaimed in force on September 1, 2008 which effectively ac- corded to Proflex a further two year grace period for revival up to Sep- tember 1, 2013. Proflex was not revived. 48 Section 227 of the ABCA allows the continuation of actions com- menced prior to dissolution even after the dissolution. However, the Claim advanced in the name of Proflex was filed after it had been struck off, so that section is of no assistance to the Appellants. 49 The Appellants argue that the Respondents did not raise the issue of ownership until after the revival period had expired. 50 Rule 13.6(2)(b) provides that a pleading must state a matter that defeats, or raises a defence to, a claim of another party. Rule 13.6 further provides: 13.6(3) A pleading must also include a statement of any matter on which a party intends to rely that may take another party by surprise, including, without limitation, any of the following matters: ...(n) lack of capacity or authority; ...(q) a limitation period; ...(r) a provision of an enactment. 51 The Statement of Claim makes no mention of the TTA or any transfer of rights. 52 Flexpipe, Bouey and Gartner filed a Statement of Defence on October 14, 2010, as did Shawcor. Budney filed a Statement of Defence on May 31, 2011. All stated in their respective paragraph 2 that Proflex’ registra- tion as a corporation was struck in July 2006. Budney’s Statement of Defence states in paragraph 4(b): “Budney is not aware of the exact rela- tionship between CTI and Proflex but understands that from their forma- tion, one or other of them owned whatever rights existed in relation to technology developed by the Plaintiffs”. 53 None of the defences: 1) alleges that neither CTI nor Wolfe has an interest in the Technology or the confidential information, 2) mentions the TTA, or 3) alleges that the claim of Proflex is a nullity. However, they could not have made the first two assertions until document produc- tion had revealed the existence of the TTA. They could not have made the latter assertion until the grace period for revival had expired. 54 It has been held that the issue of a party not having a legal personality is sufficiently raised by specifically denying its incorporation: W. Ste- venson & J. Cˆot´e, Civil Procedure Encyclopedia (Edmonton: Juriliber, 122 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

2003) at 13-48, citing U.M.W., Local 1562 v. Williams (1919), 59 S.C.R. 240, 49 D.L.R. 578 (S.C.C.), revg in part [1919] 1 W.W.R. 217 (Alta. C.A.), 235, (1919), 14 Alta. L.R. 251 (Alta. C.A.). 55 It may be that the Appellants’ belief that ownership of the Technol- ogy or confidential information was not in issue informed, in some way, the steps it took or did not take in relation to Proflex and Proflex’ pro- perty prior to the application before the Master. However, it was at all times aware of the TTA and its wording, and therefore the TTA itself cannot have taken the Appellants by surprise. Moreover, the ownership of the Technology and confidential information has been squarely in is- sue since at least March 2014. As discussed below, the evidence does not support a finding that the Appellants have exhausted the avenues which may be available to them to establish entitlement to the property in question. 56 The law is clear that a company that is struck off or dissolved lacks the capacity to sue and any claim filed in the name of the former entity is subject to being struck as an abuse of process: Bute Logging Co. v. Sand- ers (1952), 5 W.W.R. (N.S.) 142, [1952] B.C.J. No. 11 (B.C. S.C.) and cases cited at para 3. 57 The revival of a corporation with retrospective effect may save a claim which would otherwise be a nullity due to dissolution: 1036122 Alberta Ltd. v. Khurana, 2012 ABCA 10, 519 A.R. 221 (Alta. C.A.). However, no law was put forward supporting the viability of a corpora- tion’s claim filed after the corporation was struck, with no subsequent revival. The principles behind incorporation speak against such a proposition. 58 I find that the Master correctly determined that the status of Proflex, which has essentially remained unchanged throughout the litigation, ren- ders its own claim a nullity.

2 Did the Master correctly conclude that the claims should not be stayed pending possible future legislative developments? 59 Wolfe deposes in para 27 of his Affidavit sworn on June 24, 2014 that his counsel spoke to employees of the Crown who advised that there have been administrative difficulties in returning the property of dis- solved corporations to the shareholders and therefore the provincial Crown has drafted legislation to modify the existing legislation to pro- vide for ongoing revival of corporations, which would be retroactive to Wolfe v. Shawcor Ltd. S.D. Hillier J. 123

the date the earlier legislation came into force. It was anticipated that this legislation would be introduced in the fall 2014 sittings. 60 If the Appellants’ argument had any tentative weight in 2014, it car- ries absolutely no weight now. 61 It cannot serve the public interest to leave matters in abeyance where the legislature has clearly expressed the period within which the right of revival must be exercised. Proflex is moribund. To borrow from the sat- ire of Monty Python, it is a non-entity and denial does not change that fact. 62 It is now trite that the mere hope on the part of the non-moving party that something will turn up does not suffice to bar summary judgment. 63 I find that the Master correctly concluded that the claims should not be stayed pending possible future legislative developments.

3 Did the Master correctly conclude that CTI transferred all of its rights in the Technology and therefore has no standing to sue? 64 The TTA was written and executed by Wolfe for CTI, and was exe- cuted by Agnew for Proflex on September 15, 1999. The Appellants take a strident position that: a. the wording of the TTA itself supports that CTI retained residual interests in the Technology, including the right to modify design and to market internationally; b. the interpretation of the parties to the TTA as to design and mar- keting should govern; and c. the whole of the contract and factual matrix, including the rela- tionship of the parties and commercial reasons, must be also be considered. 65 The relevant terms of the TTA are summarized below: WHEREAS CTI is the registered assignee of the issued patents, pat- ents pending and patent applications in the United States, Canada and Mexico set out in Schedule A relating to flexible composite tubular structures, and methods of manufacture and connection of a flexible composite tubular structures. AND WHEREAS CTI has developed materials, structures, designs, computer software, equipment, techniques, procedures and processes relating to flexible composite pipe, including its method of construc- tion, manufacture, connection, testing and installation that are the 124 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

subject of inventions, patents, designs, trade secrets and proprietary know how. AND WHEREAS in accordance with a License Agreement between CTI and Proflex dated August 31, 1996, Proflex acquired an exclu- sive license under the patents issued, pending and applied for listed in Schedule A and an exclusive right to utilize CTI’s proprietary technical information relating to equipment, processes, manufactur- ing data, market data, test data and installation data associated with the patents and applications set out in Schedule A. AND WHEREAS Proflex desires to acquire and CTI is prepared to assign all right, title and interest in and to the patents, patents pend- ing and patent applications set out in Schedule A along with CTI’s proprietary technical information in connection therewith. NOW THEREFORE, in consideration of the mutual promises, condi- tions and covenants contained herein, the adequacy and sufficiency of which is hereby acknowledged by each party, the parties agree as follows: 1. The License Agreement between CTI and Proflex dated August 31, 1996 is hereby terminated and replaced with this Technology Transfer Agreement, 2. In this Technology Transfer Agreement the following terms will have the following definitions: a) The term “Products” shall mean composite struc- tures, materials used in their construction, and re- lated processes and equipment, and shall include: i) flexible composite pipe; ii) flexible composite pipe connections; and iii) equipment for manufacturing (i) and (ii). b) The term “Improvements” shall mean any modifi- cation to composite structures, materials, equip- ment or manufacturing processes, whether patent- able or unpatentable, constituting an improvement in the structures, materials, equipment or manufac- turing processes of CTI. c) The term “Assigned Patents” shall mean the is- sued patents as set out in Schedule A, all future patents which issue as a consequence of the patent applications set out in Schedule A, and all issued patents and patent applications assigned in the fu- ture to CTI relating to the Products. Wolfe v. Shawcor Ltd. S.D. Hillier J. 125

d) The term “Assigned Know How” shall mean such techniques, practices, knowledge, skills, exper- iences, and other proprietary information and data of CTI which are required and adequate to permit Proflex to manufacture the Products. e) The term “Net Sales Value” shall mean... 3. CTI hereby sells, assigns, transfers and sets over to Proflex its entire right, title and interest in and to: a) the inventions disclosed in the Assigned Patents; b) the Assigned Patents; and c) all issued patents and patent applications assigned in the future to CTI relating to the Products; d) the Assigned Know How. 4. Proflex agrees, as a principal condition of this Technol- ogy Transfer Agreement, to pay to CTI, or its assigns, a royal equal to two percent (2%) of the Net Sales Value of Products which are manufactured and sold and collected by Proflex... 6. CTI agrees to promptly notify Proflex of any Improve- ments obtained by CTI. With respect to any notice to Proflex by CTI of Improvements obtained by CTI, Proflex may, within sixty (60) days after the effective date of such notice, notify CTI in writing that it desires to have such Improvements included in the Assigned Patents and/or Assigned Know How (at no additional royalty) and subject to all of the terms and conditions of this agree- ment in effect at that time; otherwise, such Improvements shall not be included herein. 66 To summarize, the TTA: a. expressly replaces the prior exclusive licence to use; b. lists the three patents for flexible tubular structure, the method of manufacture and pipe coupling issued between 1992 and 1997 in Canada, U.S. and Mexico; c. assigns without conditions the inventions as patented, all future applications assigned on the products and “assigned know how”; d. refers to patents in North America but includes no geographic, temporal or other qualifiers; 126 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

e. includes in the assigned interest Schedule A “...along with CTI’s proprietary technical information in connection therewith”. 67 The factual matrix surrounding the TTA is relevant in determining the objective intentions of the parties to it: Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53 (S.C.C.) at paras 55-58. As the Supreme Court emphasizes at paras 59-60, the evidence cannot vary or contradict the wording such as by reference to subjective intentions of the parties. 68 Some of the factual matrix is not in dispute. Proflex was incorporated in 1993 to manufacture and sell the product. CTI owned almost 90% of the Proflex voting shares. Proflex sought to compete with steel and fibre- glass pipe in the oil and gas industry. One of the major challenges was to achieve a competitive cost of production. 69 The Appellants note that the second “whereas” refers to US, Canada and Mexico patents. The Appellants argue that CTI retained international marketing rights. They assert that the role of Proflex as a subsidiary to CTI was to manufacture flexible composite pipe designed by CTI only in North America. 70 It is true that the TTA expressly refers in the preamble to the issued patents, patents pending and patent applications in the United States, Canada and Mexico. However, in paragraph 3(c), CTI transferred to Proflex all issued patents and patent applications assigned to CTI in the future relating to the Products. That language is not restricted to North America. 71 As to the purpose or intent behind the TTA, the Appellants argued that paragraph 2(d) of the TTA expressly restricted the “Assigned Know How” to that which was required and adequate to permit Proflex only to manufacture the products. The TTA defines “Assigned Patents” and “As- signed Know How” specifically for the purpose of manufacture by Proflex. Paragraph 6 contemplates that CTI may make improvements which would not initially form part of the TTA. 72 The Appellants argue that the parties’ post-agreement conduct is con- sistent with an interpretation of the TTA to the effect that the parties did not understand or intend that CTI had parted with all of its rights. Specif- ically, CTI subsequently entered into agreements, to the knowledge of Proflex, which would indicate that the rights were not exclusive to Proflex. 73 The Master characterized Wolfe and Agnew’s evidence as to intent as merely evidence of subjective intentions, citing SemCanada Crude Co., Wolfe v. Shawcor Ltd. S.D. Hillier J. 127

Re, 2010 ABQB 531 (Alta. Q.B.) at para 81, (2010), 495 A.R. 367 (Alta. Q.B.); Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd., 2010 ABCA 126 (Alta. C.A.) at paras 16-18, 20, (2010), 477 A.R. 112 (Alta. C.A.). He also characterized the evidence as argument and conclusion, citing Alberta (Human Rights Commission) v. Alberta Blue Cross Plan, 1983 ABCA 207 (Alta. C.A.) at para 8, (1983), 48 A.R. 192 (Alta. C.A.). 74 The Appellants argued that, where the parties to the contract both view its terms in the same way, third parties have no involvement and cannot rely on other interpretations: Cie fran¸caise du Ph´enix v. Travelers Fire Insurance Co., [1952] 2 S.C.R. 190 (S.C.C.) at 217, [1952] S.C.J. No. 19 (S.C.C.): When the parties are in agreement as to the meaning of a provision, a court, in the absence of compelling reasons to the contrary, should construe the document in accord therewith. Adolph Lumber Company v. Meadow Creek Lumber Company [(1919) 58 Can S.C.R. 306 at 307.], Forbes v. Watt [(1872) L.R. 2 Sc. App. 214 at 216.]; Pollock on Contracts, 13th Ed., 373. 75 The issue in Ph´enix was the meaning of a particular phrase in an in- surance contract. The extent to which the three levels of court decisions consider the phrase and case law would suggest that the wording was ambiguous. Likewise, Davies C.J. in Adolph Lumber Co. v. Meadow Creek Lumber Co. [1919 CarswellBC 24 (S.C.C.)] commented that the contract in that case was so ambiguously worded that it was almost im- possible to determine from its language what the parties really intended and meant to express. The case has been followed for the proposition that subsequent conduct of the parties may be used to interpret an ambiguous contract. 76 The question, therefore, is whether the TTA is ambiguous. 77 The Appellants urged that the 2007 contract between Wolfe and Gar- neau Inc. reflects a geographic territory for the United States and Can- ada. That is a licence agreement signed two years after Proflex ceased to be active and a year after it was struck off. The other contract of June 6, 2005 between Wolfe and the Kuwaiti Group purports to represent that CTI is the owner and registered assignee of the four U.S. Patents. The agreement does not disclose that those patents were assigned to Proflex under the TTA in 1999. The conduct of CTI may suggest that it was not subjectively of the view that it had divested itself of all right in the Tech- nology. That does not necessarily mean the language in the TTA is ambiguous. 128 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

78 The Appellants argue that the design was not transferred. However, it is difficult to interpret the broad language of the TTA except in such a way as to conclude that property design is inherent in what has been transferred. That does not preclude improvements in design from emerg- ing as the TTA contemplated. 79 Ideas could emerge out of CTI in various ways including further tests, actual installation and use, and consultations by the parties. Arguably, CTI’s use of the Technology in developing these improvements would be contrary to the terms of the TTA. However, while it does appear to con- template CTI’s continued use of the Technology for development pur- poses, the TTA prescribed that where CTI obtains an Improvement, it was obliged to notify Proflex for potential, but not mandatory, inclusion at no additional royalty (para 6). That does not detract from the scope of the transfer as written. 80 Unlicensed third party infringers are to be pursued by CTI in the name of Proflex or by Proflex alone with royalty payments to be with- held (para 7). That does not modify or restrict the transfer of ownership to Proflex. 81 The Appellants also argue that the status of Proflex as a subsidiary of CTI colours the interpretation of the TTA, and CTI cannot have intended to give its ownership away entirely. However, it is not the role of this Court to second guess the business efficacy of a property transfer be- tween related companies, or to presume that a parent company would not likely divest itself of all ownership or otherwise. 82 During argument, the Appellants provided a Project Summary from October 2001 that was submitted to Shawcor in pursuit of further invest- ment. This is one document that sets out the subjective intent that Proflex has exclusive rights in North America. But it is parole evidence expres- sing subjective intent two years after the TTA. Even if it had been availa- ble to the Master, or included in supplemental materials as contemplated for this appeal, such evidence cannot be used to contradict the plain lan- guage and disclose a latent ambiguity as to intention. As confirmed in Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129, [1998] S.C.J. No. 59 (S.C.C.) at para 54, contractual intent of the parties is to be deter- mined by reference to the words the parties used in drafting the docu- ment, possibly read in light of the surrounding circumstances which were prevalent at the time. Evidence of one party’s subjective intention has no independent place in this determination, and Sattva has not done away with this principle. Wolfe v. Shawcor Ltd. S.D. Hillier J. 129

83 Overall, nothing in the circumstances varies or restricts the proper in- terpretation of the TTA as written. The transfer was not simply the right to manufacture. That was what Proflex had under its 1994 licence and this agreement speaks to a transfer of property. The Master was correct in his conclusion that Proflex owned the Technology from and after 1999. 84 However, this does not end the matter. 85 The ABCA provides: 26(1)(3) If a corporation has only one class of shares, the rights of the holders of those shares are equal in all respects and include the rights ... (c) to receive the remaining property of the corporation on dissolution. 86 There is no evidence that the affairs of Proflex were properly wound up so as to allow the shareholders (primarily CTI with its 90% interest) to claim an entitlement to the intellectual property which it had formerly granted to Proflex. The latter entity no longer exists and can no longer participate in a winding-up. 87 It is clear by virtue of s. 229 of the ABCA and s. 15 of the UPPVPA that property owned by a corporation and not disposed of at the date of dissolution of the corporation vests in the Crown in right of Alberta, sub- ject to s. 227 of the ABCA. 88 The parties referred briefly in argument to the UPPVPA. I invited and received supplemental submissions regarding the impact of the UPPVPA on the current status of any intangible property transferred to Proflex under the TTA. 89 The Appellants submit that the property transferred to Proflex under the TTA falls within intangible personal property covered by the UPPVPA as it is not expressly excluded by ss. 3 and 4 of the General Regulation, Alta Reg 104/2008. Therefore, the subject property vested in the Minister; CTI has an equitable interest and valid entitlement to the property, and is the only party in a position to regain legal title to it. The Appellants argue that CTI may avail itself of a claim under s. 48 or s. 49 of the UPPVPA. The Appellants purport to rely on hearsay from an ear- lier government in 2014 as noted above (see para 59). 90 The Respondents submit that the Minister does not hold the Technol- ogy in trust. They rely on the non-exhaustive list in s. 1(s) in support of the argument that neither the UPPVPA nor its Regulation contemplates 130 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

that this type of intellectual property would be held by the Minister. They further argue that even if it was held in trust pursuant to the Regulation, CTI does not have any interest in it and cannot bring a claim to the Min- ister under the legislation. CTI was only one of seven voting sharehold- ers of Proflex, and it is unlikely that CTI could meet the criteria under s. 22(2) of the Regulation. 91 The UPPVPA provides that “property” includes intangible personal property unless otherwise restricted by the UPPVPA or the Regulation. None of the express restrictions applies to the Technology. 92 Section 35(1) of the UPPVPA provides that no person other than a Minister may sell or otherwise dispose of the vested property of a dis- solved corporation after the date of its dissolution. Vested property trans- ferred to the Minister must be held in trust for 10 years. 93 Under s. 22(2) of the Regulation, a person representing all of the shareholders of a corporation at the time of its dissolution, or who has been granted an order by a court authorizing it, may make a claim if the revival period has elapsed. The person must provide reasonable grounds for not causing the corporation to be revived, and satisfy the Minister that injustice is likely to result if the claim is not considered and that there is no other person with a better entitlement to the property. 94 CTI has submitted that, until the summary dismissal application, it had no basis to believe that the Respondents would allege it did not have sufficient rights to sue. Therefore, CTI did not take steps to wind-up or revive Proflex. Both signatories deposed that neither party intended that CTI would divest itself of all of its interest in the Technology by virtue of the TTA. There is no evidence before the Court to suggest that anyone has a better claim of entitlement to the Technology. 95 However, the Master ruled on March 17, 2015 that the ownership of the Technology had passed to Proflex. There is no evidence that any steps have been taken at any time by CTI to make a claim under the UPPVPA. The Court might speculate on the success or otherwise of such a claim, but it would remain speculation. The affidavit evidence adverts to discussions in 2014 between counsel and Crown employees indicating that “the Minister at present is not responding to requests”. This is insuf- ficient evidence upon which to conclude that a claim has actually been made under the UPPVPA by CTI or that the Minister refused to consider such a claim. 96 The Appellants also submitted that the Master ought to have allowed them to amend their claim to seek rectification of the TTA. This remedy Wolfe v. Shawcor Ltd. S.D. Hillier J. 131

was included in written submissions to the Master at para 48 but does not appear to have been argued or considered. The Master’s decision did not address rectification. 97 There is no real dispute that the Court is empowered to allow amend- ment unless there is prejudice which cannot be repaired: Balm v. 3512061 Canada Ltd., 2003 ABCA 98 (Alta. C.A.) at para 43, (2003), 327 A.R. 149 (Alta. C.A.). 98 However, no proposed amendment wording has been prepared, nor any suggestion as to how the contract would be revised. This is not a case where third parties seek to derive a specific benefit from the TTA between Proflex and CTI. Rather, the Appellants ask the Court to decide whether the claim supports proof of ownership in CTI on this summary judgment motion as to which the parties are presumed to have prepared their best evidence. 99 The proper approach in weighing arguments on summary applications is for the court to presume that the parties have presented their strongest evidence in condensed form: 1214777 Alberta Ltd. v. 480955 Alberta Ltd., 2014 ABQB 301, [2014] A.J. No. 538 (Alta. Q.B.) citing Papaschase Indian Band No. 136 v. Canada (Attorney General), 2008 SCC 14, [2008] 1 S.C.R. 372 (S.C.C.) at 378, 382. 100 The failure to file an application or to set out wording to rectify the contract before the Master or on appeal supports the inference that it is a late strategy seeking to avoid summary dismissal. That sort of response is not consistent with the evidentiary burden which by the wording of the TTA shifted to the Appellants to show that there is arguable merit to the claim: Murphy Oil Co. v. Predator Corp., 2006 ABCA 69, 384 A.R. 251 (Alta. C.A.). 101 Again, this issue was squarely put before the Master. I conclude that the Master did not err in his interpretation of the TTA. The Appellants have had time to prepare a proper application for rectification, but have not done so.

4 Did the Master correctly conclude that Wolfe and CTI have no independent cause of action? 102 The Amended Statement of Claim contains allegations that the Re- spondents induced breaches of duties of confidentiality to CTI and Proflex, breached contractual confidentiality agreements with CTI and Proflex, and induced Bouey, Gartner and Budney to breach their fiduci- ary duties to CTI and Proflex. As well, it is alleged that the Respondents 132 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

“breached their contractual duties of confidentiality to the Plaintiffs” and misrepresented the use to which they intended information to be put, dur- ing discussions with Wolfe in 1999 which were ultimately incorporated in the confidentiality agreements between the parties. 103 The Master did not list and deal with Wolfe’s alleged personal claims but he did conclude as follows: 23 There is nothing of merit to suggest that Wolfe had a separate and distinct claim with regard to a wrong done to him as a shareholder qua individual. So it is clear that Wolfe has no separate right to ad- vance a separate cause of action. Any right he would have had would have existed either directly through CTI or Proflex (which is the case here) or if they did not advance an action he could have applied for the right to advance a derivative action. 104 The Appellants purport to take no issue that Foss v. Harbottle (1843), 2 Hare 461, 67 E.R. 189 (Eng. V.-C.) precludes Wolfe from advancing a claim, derivative or otherwise, as a shareholder of either CTI or Proflex. The challenge on appeal is whether the Master concluded correctly — although summatively - that Wolfe had no separate claims for: 1. breach of confidence to Wolfe directly; 2. loss of the sale of shares in CTI owned personally by Wolfe; 3. interference with economic interests; 4. unjust enrichment; 5. breach of contract. 105 Wolfe served as the Chief Executive Officer for CTI, and for Proflex until it was struck off. The Respondents argued that absent any agree- ment to the contrary, the technology which he developed for the benefit of CTI became the property of CTI, or its assignee and he did not retain any personal rights or claims. 106 The TTA was signed in 1999. Some of the earlier confidentiality agreements were signed by Wolfe on his own behalf, notably the Sep- tember 28, 1990 agreement between Budney and Wolfe, and September 1, 1994. 107 Most of the agreements in question were for limited duration and/or scope. In oral argument, the Appellants conceded that the terms of an agreement supersede a common law duty of non-disclosure: CP Devel- opers at paras 11-19; see also Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142, [1999] S.C.J. No. 6 (S.C.C.) at para 36. Wolfe v. Shawcor Ltd. S.D. Hillier J. 133

108 The September 1, 1994 agreement between Budney and Wolfe does contain specific provisions that were to continue after termination. The Appellants argue that Budney and Bouey used and disclosed confidential information which enabled Flexpipe to produce their product in a much shorter time frame than the five years it took Proflex in the early nineties. Wolfe refers to calculations made by Budney which he alleges are the CTI model of strips wound in a matrix and a type of slack that was unique. Budney denies that the mathematical equations were unique or that application of engineering principles to measure product variables is confidential in nature. That is the subject of the greatest debate. 109 The Appellants further argue that ARC and Shawcor are each respon- sible for their willful blindness in not recognizing that Flexpipe derived benefit from the confidential information used by Budney and Bouey. 110 The Appellants profiled the retention of materials by Shawcor as a major breach of its covenant of confidentiality, even though the docu- ments were kept in a sealed file solely in case Shawcor needed to prove what had been provided. Shawcor states unequivocally that the sealed file was never accessed from October 2001 to the commencement of this action in August 2008. That statement is uncontradicted. The personal costing notes kept by Mr. Steele to which he referred in supporting the new proposal for investment cannot constitute a breach of confidence. I find nothing in the evidence to support a causal connection between that sealed retention of material and any proof of entitlement to a remedy against the Respondents. 111 Most significantly, Wolfe confirmed in questioning (pp. 99-100) that the Technology and confidential information was owned by CTI and that none of the confidentiality agreements provide any personal right for Wolfe to exploit the technology in his own name. He clearly stated in questioning that the Technology developed at the University and later was developed in the name of CTI, Wolfe’s paycheque came from CTI, and CTI owned the Technology and confidential information. When asked how he personally suffered damages, Wolfe noted only that he was the majority shareholder in CTI and Proflex. Questioning of Agnew is consistent with this evidence. Wolfe later asserted a personal interest in the claim for unjust enrichment and intentional interference with eco- nomic interests. 112 The Appellants argued that ownership is not a conclusive factor in breach of confidence cases; they do not need to prove ownership in order to claim entitlement to the confidence and the Master was wrong to con- 134 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

clude otherwise, citing Cadbury and statements from Free Trade Medical Network Inc. v. RBC Travel Insurance Co. (2006), 215 O.A.C. 230, [2006] O.J. No. 3636 (Ont. C.A.). They note that Binnie J. stated in Cadbury at para 41 that the action on breach of confidentiality is rooted in the relationship rather than the legal characteristics of the information confided. 113 The Court in Free Trade acknowledged that the party complaining about breach of confidence may be a person entitled to the confidence, but not necessarily the owner. However, it rejected the application of that principle in the case before it, noting that the defendant did not have a relationship with the plaintiff, and the plaintiff’s only entitlement was to have the confidence respected in order to protect a third party. 114 Wolfe says his claim is for a separate and individual harm as residu- ally recognized. The Supreme Court in Hercules Management Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165, [1997] S.C.J. No. 51 (S.C.C.) did acknowledge the possibility of personal claims by individuals who hap- pen to be shareholders, but reiterates that shareholders have no claim for wrongs done to the corporation, citing at para 59 the English Court of Appeal in Prudential Assurance Co. v. Newman Industries Ltd. (No. 2) (1981), [1982] 1 All E.R. 354 (Eng. C.A.) at 367: ...When the shareholder acquires a share he accepts the fact that the value of his investment follows the fortunes of the company and that he can only exercise his influence over the fortunes of the company by the exercise of his voting rights in general meetings. The law con- fers on him the right to ensure that the company observes the limita- tions of its memorandum of association and the right to ensure that other shareholders observe the rule, imposed on them by the articles of association. If it is right that the law has conferred or should in certain restricted circumstances confirm further rights on a share- holder the scope and consequences of such further rights require careful consideration. 115 In Reach M.D. Inc. v. Pharmaceutical Manufacturers Assn. of Can- ada (2003), 65 O.R. (3d) 30, [2003] O.J. No. 2062 (Ont. C.A.) at para 46 the Court noted that the tort of interference with economic relations re- quires that the defendant’s act was targeted against the plaintiff, although the predominant purpose may well have been to advance the defendant’s interests rather than to injure the plaintiff. In R.L.T.V. Investments Inc. v. Saskatchewan Telecommunications, 2009 SKCA 83 (Sask. C.A.) at para 48, [2009] S.J. No. 457 (Sask. C.A.), the Court held that the defendant Wolfe v. Shawcor Ltd. S.D. Hillier J. 135

must have interfered with a business relationship which exists or is ex- pected to exist between the plaintiff and a third party. 116 Meditrust Healthcare Inc. v. Shoppers Drug Mart, 2002 CanLII 41710, (2002), 61 O.R. (3d) 786 (Ont. C.A.) dealt with a claim that the actions of Shoppers Drug Mart caused harm to the subsidiaries of the parent plaintiff Meditrust, giving rise to an unjust enrichment claim. The Court held that Meditrust had not filed any evidence of separate damages to it. Any loss of business opportunities were impacts on the subsidiaries and not claimable by the parent. 117 In Kaverit Steel & Crane Ltd. v. Kone Corp. (1993), 10 Alta. L.R. (3d) 103, [1993] A.J. No. 402 (Alta. C.A.), the Court found a third party withdrew a formal offer to purchase specific shares because of the de- fendants’ representations. The shares in question were not in Kaverit but in an entirely separate numbered company. 118 The Appellants argue that the Master was incorrect in holding that there must be detriment established by a claimant alleging breach of con- fidentiality, citing a number of cases. As argued by the Respondents, those cases are either distinguishable or fail to properly consider the Su- preme Court decision in International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574, [1989] S.C.J. No. 83 (S.C.C.). 119 Even Binnie J.’s dicta in Cadbury anticipate the need for proof of some form of loss or detriment along a spectrum of damaging impact. Any loss here would accrue to Proflex as the entity alleging a loss of competitive advantage. The other Appellants do not have a separate residual claim of detriment. 120 On the best evidence, the terms of an ARC term sheet of March 27, 2001 (Exhibit S in Wolfe’s Affidavit sworn on June 27, 2014) contem- plated that more shares in CTI would be purchased above what ARC acquired by exchange or other transaction. Nothing in the evidence links even by inference the failure to complete a deal on this term sheet with any breach of confidence against the interests of Wolfe, much less that it could support a separate cause of action in his name. 121 Similarly, Shawcor declined to invest in October 2001 after assessing that the Proflex product was too expensive to manufacture (Graham Affi- davit pp. 4-5, para 13-20). No cause of action by Wolfe derives from that business decision either. 122 On the pleadings, Wolfe and CTI do not assert any personal damages that are not linked to their shareholder interests. From full review of the 136 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

profiled evidence, it was CTI who had the right, title or interest in the Technology. As previously discussed, CTI in turn transferred rights to Proflex under the TTA. I find no basis upon which Wolfe or CTI can assert an independent claim against the Respondents in these actions. Their assertions of separate and extant breaches of confidentiality are without merit.

5 Did the Master correctly conclude that it was fair and just to summarily dismiss the whole of the action as an abuse lacking merit within the scope of Rule 7.3? 123 The Master held that viva voce evidence was not required to properly resolve the case, as there was no genuine issue of a potentially decisive material fact. 124 The test for summary judgment has been settled in a series of recent Alberta Court of Appeal cases relying on C. (R.) v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41 (S.C.C.) and Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C.) which authorize the affordable, timely and just adjudication of claims. These decisions include: Windsor v. Canadian Pacific Railway, 2014 ABCA 108, 572 A.R. 317 (Alta. C.A.); Access Mortgage Corp. (2004) Ltd. v. Arres Capital Inc., 2014 ABCA 280, 584 A.R. 68 (Alta. C.A.); 776826 Alberta Ltd. v. Ostrowercha, 2015 ABCA 49, 593 A.R. 391 (Alta. C.A.); Sherwood Steel Ltd. v. Odyssey Construction Inc., 2014 ABCA 320, 5 Alta. L.R. (6th) 268 (Alta. C.A.); Ernst v. EnCana Corp., 2014 ABCA 285, 580 A.R. 341 (Alta. C.A.). 125 Essentially, the Court is called upon to examine whether: (a) the evidence is sufficient to make reliable findings of fact; (b) the case allows the law to be properly applied to the facts; (c) the expediency is justified in the circumstances. 126 Decisions have described the new standard for measuring the merit of summary judgment position as “unassailable”. Cases which reach that standard need to be compelling, such that the likelihood of success is very high. 127 It remains clear that summary judgment should not be granted if is- sues are unsettled, complex or intertwined with disputed facts where evi- dence must be weighed: Elbow River Marketing Limited Partnership v. Canada Clean Fuels Inc., 2012 ABCA 328 (Alta. C.A.) at para 33. 128 The mere assertion of a position by the non-moving party in a plead- ing or otherwise, or the mere hope of the non-moving party that some- Wolfe v. Shawcor Ltd. S.D. Hillier J. 137

thing will turn up at a trial, does not suffice. The key is whether the circumstances require viva voce evidence in order to properly resolve the case: see Papaschase Indian Band No. 136 v. Canada (Attorney Gen- eral), 2008 SCC 14 (S.C.C.) at paras 10 to 11, [2008] 1 S.C.R. 372 (S.C.C.). 129 The Master at para 25 addressed the modern view that summary judg- ment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. He quoted from 776826 Alberta Ltd at para 12, distinguishing the test ap- plied under Rule 3.68 for striking out pleadings as to “... any reasonable prospect of success, erring on the side of generosity in permitting novel claims to proceed”. 130 I note that these proceedings commenced in 2008 and that extensive questioning has resulted in numerous undertakings. This is relevant be- cause the parties are obliged on such applications to put their best evi- dence forward. 131 I find that the Master did not err in determining that this is an appro- priate case for summary judgment based on the status of each of the Ap- pellants in relation to the claim.

6 Did the Master consider the positions of the parties, fairly weigh the merits and provide adequate reasons for his decision. 132 I find that the Master’s reasons are intelligible and susceptible to meaningful review. In all events, I have re-examined and articulated fur- ther why summary dismissal was justified in the circumstances.

Decision 133 In summary: 1. the status of Proflex renders its claims a nullity; 2. the claims should not be stayed pending possible future legislative developments; 3. CTI transferred all of its rights in the Technology and therefore has no standing to sue; 4. Wolfe has no personal cause of action; 5. it was fair and just to dismiss the whole of the action as an abuse lacking merit within the scope of Rule 7.3; and 138 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

6. the Master’s reasons are adequate. 134 In the result the decision of the Master is affirmed and the appeal is dismissed.

Costs 135 If the parties are unable to agree on costs, they may speak to me within 45 days of this decision. Appeal dismissed. Grenon v. Canada Revenue Agency 139

[Indexed as: Grenon v. Canada Revenue Agency] James T. Grenon, Plaintiff/Respondent and Canada Revenue Agency, Attorney General of Canada, Scott Shelton, Gordon Lawrence, Derek Carroll, Gordon Ross, Helen Little, Andre Baril, Jane Doe, John Doe, Bruce Lo, Lizy Jacob and Judith Thain, Defendants/Applicants Alberta Court of Queen’s Bench Docket: Calgary 1501-01439 2016 ABQB 260 C. Dario J. Heard: October 7, 2015 Judgment: May 6, 2016 Tax –––– Income tax — Administration and enforcement — Practice and procedure on appeals — Striking out pleadings –––– Taxpayer brought action alleging negligence, misfeasance in public office and interference with contrac- tual relations and fiduciary duty, arising from conduct of defendant Canada Rev- enue Agency (CRA) and its officers in course of audit of taxpayer and his re- lated business entities, including RRSP — Taxpayer’s appeal of reassessment to Tax Court of Canada was pending — CRA brought application to strike state- ment of claim — Application granted in part — Circumstances warranted strik- ing parts of statement of claim pursuant to R. 3.68(1)(a) of Alberta Rules of Court — Taxpayer’s claim that reassessments were improper, unlawful and in- valid was within exclusive jurisdiction of Tax Court — Taxpayer’s claims per- taining to jeopardy orders and abuses of process of Federal Court of Canada were outside jurisdiction of provincial court — Taxpayer’s claims of inducing breach of contractual relations and fiduciary duty had no reasonable prospect of success, as CRA’s refusal to breach, misstate or ignore provisions of Income Tax Act could not give rise to cause of action — CRA had no duty of care to individual taxpayer, so taxpayer’s claim of negligence had no reasonable chance of success — Taxpayer’s claim for tort of abuse of process had no reasonable chance of success, as neither improper purpose nor definite act or threat in fur- therance of such purpose was established by pleading — Taxpayer’s claims stemming from reassessment of RRSP were brought by wrong party and had no reasonable prospect of success — Improper words in terms “extensive improper auditing activities”, “improper collection activities” and “CRA shakedown strat- egy” were struck — Taxpayer’s claim of misfeasance in public office could not be determined without ruling by Tax Court as to validity of reassessments, so 140 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

they were stayed, and claim was limited to matters relating to reassessment against him personally. Civil practice and procedure –––– Pleadings — Statement of claim — Strik- ing out for absence of reasonable cause of action — Lack of jurisdic- tion –––– Taxpayer brought action alleging negligence, misfeasance in public of- fice and interference with contractual relations and fiduciary duty, arising from conduct of defendant Canada Revenue Agency (CRA) and its officers in course of audit of taxpayer and his related business entities, including RRSP — Tax- payer’s appeal of reassessment to Tax Court of Canada was pending — CRA brought application to strike statement of claim — Application granted in part — Circumstances warranted striking parts of statement of claim pursuant to R. 3.68(1)(a) of Alberta Rules of Court — Certain claims were struck pursuant to R. 3.68(2)(a) of Rules — Taxpayer’s claim that reassessments were improper, unlawful and invalid was outside jurisdiction of provincial court and was within exclusive jurisdiction of Tax Court — Concerns with respect to jeopardy orders were to be brought before Federal Court of Canada — Taxpayer’s claims per- taining to abuses of process of Federal Court were outside jurisdiction of provin- cial court — Taxpayer’s claim of misfeasance in public office could not be de- termined without ruling by Tax Court as to validity of reassessments, so they were stayed. Civil practice and procedure –––– Pleadings — Statement of claim — Strik- ing out for absence of reasonable cause of action — Plain and obvious –––– Taxpayer brought action alleging negligence, misfeasance in public office and interference with contractual relations and fiduciary duty, arising from conduct of defendant Canada Revenue Agency (CRA) and its officers in course of audit of taxpayer and his related business entities, including RRSP — Taxpayer’s ap- peal of reassessment to Tax Court of Canada was pending — CRA brought ap- plication to strike statement of claim — Application granted in part — Circum- stances warranted striking parts of statement of claim pursuant to R. 3.68(1)(a) of Alberta Rules of Court — Portions of statement of claim were struck pursuant to R. 3.68(2)(b) of Rules for having no reasonable cause of action — Taxpayer’s claims of inducing breach of contractual relations and fiduciary duty had no rea- sonable prospect of success, as CRA’s refusal to breach, misstate or ignore pro- visions of Income Tax Act could not give rise to cause of action — CRA had no duty of care to individual taxpayer, so taxpayer’s claim of negligence had no reasonable chance of success — Taxpayer’s claim for tort of abuse of process had no reasonable chance of success, as neither improper purpose nor definite act or threat in furtherance of such purpose was established by pleading — Tax- payer’s claims stemming from reassessment of RRSP were brought by wrong party and had no reasonable prospect of success — Improper words in terms “extensive improper auditing activities”, “improper collection activities” and “CRA shakedown strategy” were struck — Taxpayer’s claim of misfeasance in Grenon v. Canada Revenue Agency 141 public office could not be determined without ruling by Tax Court as to validity of reassessments, so they were stayed. Cases considered by C. Dario J.: AB Hassle v. Apotex Inc. (2005), 2005 FC 234, 2005 CarswellNat 389, 38 C.P.R. (4th) 216, 2005 CF 234, 2005 CarswellNat 2640, [2005] 4 F.C.R. 229, 271 F.T.R. 30, [2005] F.C.J. No. 279 (F.C.) — referred to Addison & Leyen Ltd. v. Canada (2007), 2007 SCC 33, 2007 CarswellNat 1915, 2007 CarswellNat 1916, (sub nom. Canada v. Addison & Leyen Ltd.) 2007 D.T.C. 5365 (Eng.), (sub nom. Canada v. Addison & Leyen Ltd.) 2007 D.T.C. 5368 (Fr.), [2007] S.C.J. No. 33, (sub nom. Addison & Leyen Ltd. v. Canada Customs & Revenue Agency) 365 N.R. 62, 284 D.L.R. (4th) 385, 65 Admin. L.R. (4th) 1, [2008] 2 C.T.C. 129, (sub nom. Canada v. Addison & Leyen Ltd.) [2007] 2 S.C.R. 793 (S.C.C.) — considered Anns v. Merton London Borough Council (1977), [1978] A.C. 728, [1977] 2 W.L.R. 1024, (sub nom. Anns v. London Borough of Merton) [1977] 2 All E.R. 492, 121 S.J. 377, [1977] UKHL 4 (U.K. H.L.) — referred to Apotex Inc. v. Sanofi-Aventis Canada Inc. (2010), 2010 FC 182, 2010 Car- swellNat 345, 2010 CF 182, 2010 CarswellNat 2638, (sub nom. Apotex Inc. v. Sanofi-Aventis) 364 F.T.R. 131 (Eng.) (F.C.) — considered Arabi v. Alberta (2014), 2014 ABQB 295, 2014 CarswellAlta 795, 589 A.R. 249, [2014] A.J. No. 518 (Alta. Q.B.) — considered Big Bear Hills Inc. v. Bennett Jones Alberta Ltd. Liability Partnership (2010), 2010 ABQB 764, 2010 CarswellAlta 2421, 507 A.R. 21 (Alta. Q.B.) — considered Canada (Attorney General) v. TeleZone Inc. (2010), 2010 SCC 62, 2010 Cars- wellOnt 9657, 2010 CarswellOnt 9658, 96 C.L.R. (3d) 1, 13 Admin. L.R. (5th) 24, 56 C.E.L.R. (3d) 1, 327 D.L.R. (4th) 527, 410 N.R. 1, [2010] S.C.J. No. 62, [2010] A.C.S. No. 62, (sub nom. TeleZone Inc. v. Canada (Attorney General)) 273 O.A.C. 1, [2010] 3 S.C.R. 585, (sub nom. TeleZone Inc. v. Canada (Attorney General)) 108 O.R. (3d) 239 (S.C.C.) — distinguished Canus Fisheries Ltd. v. Canada (Customs & Revenue Agency) (2005), 2005 NSSC 283, 2005 CarswellNS 444, 237 N.S.R. (2d) 166, 754 A.P.R. 166, [2005] N.S.J. No. 413 (N.S. S.C.) — referred to Cooper v. Hobart (2001), 2001 SCC 79, 2001 CarswellBC 2502, 2001 Car- swellBC 2503, [2002] 1 W.W.R. 221, [2001] S.C.J. No. 76, 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, 8 C.C.L.T. (3d) 26, (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] 3 S.C.R. 537, REJB 2001-26862, [2001] B.C.T.C. 215, 2001 CSC 79 (S.C.C.) — re- ferred to Donaldson v. Farrell (2011), 2011 ABQB 11, 2011 CarswellAlta 21 (Alta. Q.B.) — referred to 142 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Everest Canadian Properties Ltd. v. Mallmann (2008), 2008 BCCA 276, 2008 CarswellBC 1373, 46 B.L.R. (4th) 198, [2008] 10 W.W.R. 60, 82 B.C.L.R. (4th) 230, 258 B.C.A.C. 49, 434 W.A.C. 49, 294 D.L.R. (4th) 622, [2008] B.C.J. No. 1258 (B.C. C.A.) — considered F. (A.) v. Alberta (2014), 2014 ABQB 216, 2014 CarswellAlta 585, 306 C.R.R. (2d) 358, 587 A.R. 165 (Alta. Q.B.) — considered Feng v. Minister of National Revenue (2016), 2016 FC 66, 2016 CarswellNat 160 (F.C.) — referred to Foote v. Canada (Attorney General) (2011), 2011 BCSC 1062, 2011 Car- swellBC 2059, 2011 G.T.C. 2046 (Eng.), 239 C.R.R. (2d) 367, 2011 D.T.C. 5139 (Eng.), [2011] G.S.T.C. 117 (B.C. S.C. [In Chambers]) — referred to Foote v. Canada (Attorney General) (2015), 2015 BCSC 849, 2015 CarswellBC 1379, 2015 D.T.C. 5060 (Eng.), [2015] 5 C.T.C. 150, [2015] G.S.T.C. 47 (B.C. S.C.) — considered Foss v. Harbottle (1843), 67 E.R. 189, 2 Hare 461 (Eng. V.-C.) — followed Fullowka v. Royal Oak Mines Inc. (1996), 1996 CarswellNWT 70, [1996] N.W.T.J. No. 95, (sub nom. Fullowka v. Whitford) 147 D.L.R. (4th) 531, (sub nom. Fullowka v. Whitford) [1997] N.W.T.R. 1, (sub nom. Fullowka v. Whitford) 36 C.C.L.T. (2d) 58 (N.W.T. C.A.) — considered Gardner v. Canada (Attorney General) (2013), 2013 ONCA 423, 2013 Cars- wellOnt 8308, [2013] 5 C.T.C. 210, 308 O.A.C. 184, 2 C.C.L.T. (4th) 210, 116 O.R. (3d) 304 (Ont. C.A.) — considered Gray v. Canada (Attorney General) (2012), 2012 NBQB 375, 2012 CarswellNB 732, 1028 A.P.R. 112, 397 N.B.R. (2d) 112 (N.B. Q.B.) — considered HOOPP Realty Inc. v. Guarantee Co. of North America (2015), 2015 ABCA 336, 2015 CarswellAlta 2026, 607 A.R. 377, 653 W.A.C. 377 (Alta. C.A.) — considered Harris v. GlaxoSmithKline Inc. (2010), 2010 ONSC 2326, 2010 CarswellOnt 2501, [2010] O.J. No. 1710, 101 O.R. (3d) 665 (Ont. S.C.J.) — considered Hovsepian v. Westfair Foods Ltd. (2001), 2001 ABQB 700, 2001 CarswellAlta 1113, [2001] 10 W.W.R. 504, 17 B.L.R. (3d) 291, 95 Alta. L.R. (3d) 331, 296 A.R. 283, [2001] A.J. No. 1074 (Alta. Q.B.) — considered Ilic v. Calgary Sun (1998), 1998 CarswellAlta 513, 61 Alta. L.R. (3d) 322, [1999] 1 W.W.R. 539, (sub nom. Ilic v. Toronto Sun Publishing Corp.) 224 A.R. 116, 42 C.C.L.T. (2d) 301, [1998] A.J. No. 583, 1998 ABQB 419 (Alta. Q.B.) — considered Jacobson v. Skurka (2015), 2015 ONSC 1699, 2015 CarswellOnt 3624, 125 O.R. (3d) 279 (Ont. S.C.J.) — considered Johnson v. Minister of National Revenue (2015), 2015 CarswellNat 403, 2015 FCA 51, [2015] G.S.T.C. 24, 469 N.R. 326, 2015 CAF 51, 2015 Car- swellNat 4821 (F.C.A.) — considered Grenon v. Canada Revenue Agency 143

Johnson v. R. (2015), 2015 FCA 52, 2015 CarswellNat 376, [2015] G.S.T.C. 25, 2015 CAF 52, 2015 CarswellNat 2012, (sub nom. Johnson v. Minister of National Revenue) 470 N.R. 183 (F.C.A.) — considered Knight v. Imperial Tobacco Canada Ltd. (2011), 2011 SCC 42, 2011 Car- swellBC 1968, 2011 CarswellBC 1969, 21 B.C.L.R. (5th) 215, [2011] 11 W.W.R. 215, 25 Admin. L.R. (5th) 1, 86 C.C.L.T. (3d) 1, (sub nom. British Columbia v. Imperial Tobacco Canada Ltd.) 335 D.L.R. (4th) 513, (sub nom. British Columbia v. Imperial Tobacco Canada Ltd.) 419 N.R. 1, [2011] S.C.J. No. 42, (sub nom. British Columbia v. Imperial Tobacco Canada Ltd.) 308 B.C.A.C. 1, [2011] A.C.S. No. 42, (sub nom. British Columbia v. Imperial Tobacco Canada Ltd.) 521 W.A.C. 1, 83 C.B.R. (5th) 169, [2011] 3 S.C.R. 45 (S.C.C.) — referred to L. (P.) v. Alberta (2011), 2011 ABQB 771, 2011 CarswellAlta 2262, 529 A.R. 1 (Alta. Q.B.) — considered L. (P.) v. Alberta (2012), 2012 ABQB 309, 2012 CarswellAlta 1001, 64 Alta. L.R. (5th) 322, 529 A.R. 21 (Alta. Q.B.) — considered Leroux v. Canada Revenue Agency (2014), 2014 BCSC 720, 2014 CarswellBC 1179, 2014 D.T.C. 5068 (Eng.), [2014] G.S.T.C. 60, [2014] 6 C.T.C. 71, 13 C.C.L.T. (4th) 75 (B.C. S.C.) — considered Los Angeles Salad Co. v. Canadian Food Inspection Agency (2013), 2013 BCCA 34, 2013 CarswellBC 197, 40 B.C.L.R. (5th) 213, 99 C.C.L.T. (3d) 121, [2013] 4 W.W.R. 532, 358 D.L.R. (4th) 581, 334 B.C.A.C. 24, 572 W.A.C. 24 (B.C. C.A.) — referred to Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc. (2011), 2011 FC 247, 2011 CarswellNat 470, 92 C.P.R. (4th) 76 (F.C.) — referred to Ludmer v. Canada (Attorney General) (2015), EYB 2015-250118, 2015 QCCS 1218, 2015 CarswellQue 2647 (C.S. Que.) — not followed M. (A.) v. Matthews (2003), 2003 ABQB 942, 2003 CarswellAlta 1629, 20 C.C.L.T. (3d) 54, 344 A.R. 182, 30 Alta. L.R. (4th) 297, [2004] 11 W.W.R. 365, [2003] A.J. No. 1418 (Alta. Q.B.) — considered Magno v. Lariviere (2014), 2014 ONSC 705, 2014 CarswellOnt 5281 (Ont. S.C.J.) — considered Mayer v. Osborne Contracting Ltd. (2012), 2012 BCCA 77, 2012 CarswellBC 475, 75 C.B.R. (5th) 1, 29 B.C.L.R. (5th) 232, [2012] 7 W.W.R. 1, (sub nom. Mayer v. Mayer) 317 B.C.A.C. 132, (sub nom. Mayer v. Mayer) 540 W.A.C. 132 (B.C. C.A.) — considered McCreight v. Canada (Attorney General) (2013), 2013 ONCA 483, 2013 Cars- wellOnt 9725, 116 O.R. (3d) 429, 308 O.A.C. 128, [2013] O.J. No. 3263, 287 C.R.R. (2d) 272, 4 C.C.L.T. (4th) 44 (Ont. C.A.) — distinguished Merchant Law Group v. Canada Revenue Agency (2010), 2010 FCA 184, 2010 CarswellNat 2088, 2010 CAF 184, 2010 CarswellNat 3175, 321 D.L.R. (4th) 301, (sub nom. Merchant Law Group v. R.) 2010 G.T.C. 1050 (Eng.), 405 N.R. 160, [2010] G.S.T.C. 105 (F.C.A.) — considered 144 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Mikisew Cree First Nation v. Canada (Attorney General) (2016), 2016 ABQB 191, 2016 CarswellAlta 573 (Alta. Q.B.) — considered Minister of National Revenue v. Grenon (Trust of) (2015), 2015 FC 1050, 2015 CarswellNat 4379, 2015 D.T.C. 5099, [2016] 1 C.T.C. 197, 2015 CF 1050, 2015 CarswellNat 8718 (F.C.) — referred to NEP Canada ULC v. MEC OP LLC (2014), 2014 ABCA 140, 2014 Carswell- Alta 685, [2014] 6 W.W.R. 231, 95 Alta. L.R. (5th) 264, [2014] A.J. No. 441, (sub nom. O’Connor Associates Environmental Inc. v. MEC OP LLC) 572 A.R. 354, (sub nom. O’Connor Associates Environmental Inc. v. MEC OP LLC) 609 W.A.C. 354 (Alta. C.A.) — considered National Trust Co. v. R. (1998), 1998 CarswellNat 1081, (sub nom. R. v. National Trust Co.) 98 D.T.C. 6409, (sub nom. National Trust Co. v. Can- ada) 162 D.L.R. (4th) 704, (sub nom. Minister of National Revenue v. National Trust Co.) 229 N.R. 3, [1998] 4 C.T.C. 26, 19 C.C.P.B. 204, [1998] F.C.J. No. 968, 1998 CarswellNat 3997 (Fed. C.A.) — referred to Newcombe v. R. (2013), 2013 FC 955, 2013 CarswellNat 3482, 2013 CF 955, 2013 CarswellNat 4052, [2014] 1 C.T.C. 58, 2013 D.T.C. 5160 (Eng.), (sub nom. Newcombe v. Canada) 439 F.T.R. 157 (Eng.) (F.C.) — referred to Odhavji Estate v. Woodhouse (2003), 2003 SCC 69, 2003 CarswellOnt 4851, 2003 CarswellOnt 4852, 19 C.C.L.T. (3d) 163, [2003] S.C.J. No. 74, 233 D.L.R. (4th) 193, 312 N.R. 305, 180 O.A.C. 201, [2003] 3 S.C.R. 263, 11 Admin. L.R. (4th) 45, 70 O.R. (3d) 253 (note), [2004] R.R.A. 1, 2003 CSC 69 (S.C.C.) — followed Polsom v. Couston (2014), 2014 ABQB 43, 2014 CarswellAlta 252, 581 A.R. 342, 5 Alta. L.R. (6th) 106 (Alta. Q.B.) — referred to Qu´ebec (Agence du revenu) c. Groupe Enico inc. (2016), 2016 QCCA 76, EYB 2016-261183, 2016 CarswellQue 162 (C.A. Que.) — distinguished R. v. Ereiser (2013), 2013 FCA 20, 2013 CarswellNat 162, 2013 D.T.C. 5036 (Eng.), [2013] 3 C.T.C. 49, 2013 CAF 20, 2013 CarswellNat 1341, (sub nom. Ereiser v. Minister of National Revenue) 444 N.R. 64 (F.C.A.) — considered Ritter v. Minister of National Revenue (2013), 2013 FC 411, 2013 CarswellNat 1073, 2013 CF 411, 2013 CarswellNat 1514, [2013] 4 C.T.C. 145, 2013 D.T.C. 5089 (Eng.), 431 F.T.R. 208 (Eng.) (F.C.) — referred to Rocky Mountain Rail Society v. H & D Hobby Distributing Ltd. (1995), 27 Alta. L.R. (3d) 424, 24 C.C.L.T. (2d) 97, 167 A.R. 16, 1995 CarswellAlta 94, [1995] A.J. No. 228 (Alta. Q.B.) — considered Roitman v. R. (2006), 2006 FCA 266, 2006 CarswellNat 2299, (sub nom. R. v. Roitman) 2006 D.T.C. 6514 (Eng.), [2006] 5 C.T.C. 142, 2006 CAF 266, 2006 CarswellNat 3587, (sub nom. Roitman v. Canada) 353 N.R. 75, [2006] F.C.J. No. 1177 (F.C.A.) — considered Grenon v. Canada Revenue Agency 145

Rowe v. Unum Life Insurance Co. of America (2006), 2006 CarswellOnt 2975, 2006 C.E.B. & P.G.R. 8199 (headnote only), 37 C.C.L.I. (4th) 32, [2006] O.J. No. 1897 (Ont. S.C.J.) — considered Scheuer v. Canada Revenue Agency (2015), 2015 FC 74, 2015 CarswellNat 170, [2015] 2 C.T.C. 135, (sub nom. Scheuer v. R.) 2015 D.T.C. 5034 (Eng.), 2015 CF 74, 2015 CarswellNat 2003 (F.C.) — referred to Scheuer v. R. (2016), 2016 FCA 7, 2016 CarswellNat 48, (sub nom. Scheuer v. Canada) 480 N.R. 263, [2016] 3 C.T.C. 174, 2016 D.T.C. 5011 (F.C.A.) — considered Stoney Nakoda Nations v. Canada (Attorney General) (2015), 2015 ABQB 565, 2015 CarswellAlta 1686 (Alta. Q.B.) — considered Stoney Tribal Council v. Imperial Oil Resources Ltd. (2012), 2012 ABQB 557, 2012 CarswellAlta 1547, [2012] 4 C.N.L.R. 290, [2013] 9 W.W.R. 395, 82 Alta. L.R. (5th) 1, 547 A.R. 369 (Alta. Q.B.) — referred to Stoney Tribal Council v. Imperial Oil Resources Ltd. (2014), 2014 ABQB 408, 2014 CarswellAlta 1137, [2014] 9 W.W.R. 340, 100 Alta. L.R. (5th) 28, [2015] 1 C.N.L.R. 387, 592 A.R. 145 (Alta. Q.B.) — referred to Temple v. Minister of National Revenue (2001), 2001 FCT 1254, 2001 Car- swellNat 2615, 2002 D.T.C. 6762, [2002] 1 C.T.C. 167, [2002] 2 F.C. 458, 2001 CarswellNat 3529, 214 F.T.R. 305 (Fed. T.D.) — considered Toronto (City) v. C.U.P.E., Local 79 (2003), 2003 SCC 63, 2003 CarswellOnt 4328, 2003 CarswellOnt 4329, 2003 C.L.L.C. 220-071, 232 D.L.R. (4th) 385, [2003] S.C.J. No. 64, 311 N.R. 201, 120 L.A.C. (4th) 225, 179 O.A.C. 291, 17 C.R. (6th) 276, [2003] 3 S.C.R. 77, 9 Admin. L.R. (4th) 161, 31 C.C.E.L. (3d) 216, REJB 2003-49439 (S.C.C.) — referred to Tottrup v. Alberta (Minister of Environment) (2000), 2000 CarswellAlta 365, (sub nom. Tottrup v. Lund) 186 D.L.R. (4th) 226, (sub nom. Tottrup v. Lund) [2000] A.J. No. 435, (sub nom. Tottrup v. Lund) 255 A.R. 204, (sub nom. Tottrup v. Lund) 220 W.A.C. 204, 21 Admin. L.R. (3d) 58, 81 Alta. L.R. (3d) 27, [2000] 9 W.W.R. 21, 34 C.E.L.R. (N.S.) 250, 2000 ABCA 121 (Alta. C.A.) — considered Tractor Supply Co. of Texas L.P. v. TSC Stores L.P. (2009), 2009 FC 154, 2009 CarswellNat 362, 72 C.P.R. (4th) 75, 341 F.T.R. 157 (Eng.), [2009] F.C.J. No. 199 (F.C.) — referred to Tractor Supply Co. of Texas L.P. v. TSC Stores L.P. (2009), 2009 FCA 352, 2009 CarswellNat 4066, 81 C.P.R. (4th) 1, 2009 CAF 352, 2009 Car- swellNat 5546, 399 N.R. 1, [2009] F.C.J. No. 1562 (F.C.A.) — referred to Trans-Pacific Shipping Co. v. Atlantic & Orient Trust Co. (2005), 2005 FC 311, 2005 CarswellNat 625, 2005 CF 311, 2005 CarswellNat 4377, [2005] F.C.J. No. 416, [2005] A.C.F. No. 416 (F.C.) — referred to WestJet Airlines Ltd. v. Air Canada (2005), 2005 CarswellOnt 2101, [2005] O.J. No. 2310 (Ont. S.C.J.) — considered 146 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

783783 Alberta Ltd. v. Canada (Attorney General) (2010), 2010 ABCA 226, 2010 CarswellAlta 1379, [2010] A.J. No. 783, 2010 D.T.C. 5125 (Eng.), [2010] 6 C.T.C. 194, 89 C.P.C. (6th) 21, 322 D.L.R. (4th) 56, 76 C.C.L.T. (3d) 32, 29 Alta. L.R. (5th) 37, [2010] 12 W.W.R. 472, 482 A.R. 136, 490 W.A.C. 136 (Alta. C.A.) — referred to 3058354 Nova Scotia Co. v. On*Site Equipment Ltd. (2011), 2011 ABCA 168, 2011 CarswellAlta 913, 334 D.L.R. (4th) 261, 48 Alta. L.R. (5th) 404, [2011] 12 W.W.R. 239, 505 A.R. 289, 522 W.A.C. 289 (Alta. C.A.) — considered Statutes considered: Criminal Code, R.S.C. 1985, c. C-46 Generally — referred to Federal Courts Act, R.S.C. 1985, c. F-7 Generally — referred to s. 17 — considered Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) Generally — referred to s. 152(8) — considered s. 159 — considered s. 159(1) — referred to s. 159(2) — considered Tax Court of Canada Act, R.S.C. 1985, c. T-2 s. 12(1) — considered Rules considered: Alberta Rules of Court, Alta. Reg. 390/68 R. 129 — referred to Alberta Rules of Court, Alta. Reg. 124/2010 R. 3.68 — considered R. 3.68(1)(a) — considered R. 3.68(1)(d) — considered R. 3.68(2)(a) — considered R. 3.68(2)(b) — considered R. 3.68(2)(c) — considered R. 3.68(2)(e) — considered R. 13.6(1) — considered

APPLICATION by Canada Revenue Agency to strike taxpayer’s statement of claim.

Bryan C. Duguid, Q.C., for Plaintiff Chang Du, for Defendants Grenon v. Canada Revenue Agency C. Dario J. 147

C. Dario J.: I. Background 1 This application is brought by the Defendants to strike the Statement of Claim filed by the Plaintiff, James T. Grenon (“Grenon”). Grenon al- leges a number of causes of action, including negligence, misfeasance in public office and interference with contractual relations and fiduciary duty, all arising from the conduct of the Defendant Canada Revenue Agency (“CRA”) and its officers in the course of an audit of Grenon and several business entities associated with him. The Defendants argue nu- merous grounds in favour of their application to strike. 2 The following brief recitation of facts is summarized from Grenon’s Statement of Claim filed February 5, 2015. 3 Grenon is a former resident of Calgary, Alberta who moved to New Zealand in October 2012. 4 The CRA is an agent of the federal Crown statutorily mandated to administer and enforce federal taxation legislation. The Defendant Attor- ney General of Canada (“AG”) represents Her Majesty the Queen in Right of Canada. The Defendant Scott Shelton (“Shelton”) was at all ma- terial times the Assistant Director of Audit of the CRA Calgary Tax Ser- vice Office. The Defendant, Gordon Lawrence (“Lawrence”) was at all material times the Manager for Aggressive Tax Planning and Specialty Audits of the CRA Calgary Tax Service Office. The Defendant Derek Carroll (“Carroll”) was at all material times a Team Leader of the Audit division of the CRA Calgary Tax Service Office. The Defendant Gordon Ross (“Ross”) was at all material times a Manager, Revenue Collections of the CRA Calgary Tax Service Office. The Defendant Helen Little (“Little”) was at all material times a Team Leader of the Audit division of the CRA Calgary Tax Service Office. The Defendant Andre Baril (“Baril”) was at all material times a supervisor of the CRA’s collections personnel in Calgary and was the supervisor of the Defendant Judith Thain. The Defendant Judith Thain (“Thain”) was at all material times an employee of the CRA who conducted investigations into the financial affairs of Grenon and his common-law partner. The Defendant Bruce Lo (“Lo”) was at all material times an auditor with the CRA Calgary Tax Service Office who managed the audit of a number of corporations wholly owned by Grenon and participated in the audit of Grenon. The Defendant Lizy Jacob (“Jacob”) was at all material times an auditor with the CRA Calgary Tax Service Office who managed the audit of a number of income funds in which Grenon invested and participated in the audit 148 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

of Grenon. The individual Defendants are collectively referred to as the “CRA Personnel” and all were involved in either or both of the auditing and collection activities against Grenon and entities with which he was involved. The Defendants Jane Doe and John Doe were one or more ex- ecutive decision makers or supervisors within the CRA who directed and oversaw the auditing and collection activities of the CRA Personnel. Shelton, Lawrence, Carroll, Ross, Little, Baril, Jane Doe and John Doe were at all material times the supervising auditors (“Supervising Audi- tors”) of the audits and collections against Grenon and associated entities. 5 In or around 2003, Grenon began investing in mutual fund trusts (“MFTs”), holding the same within a registered retirement savings plan at CIBC Wood Gundy (the “CIBC RRSP”). At all material times, the trustee of the CIBC RRSP was CIBC Trust Company, acting through its agents, CIBC Wood Gundy and CIBC World Markets Inc. 6 Grenon also held an RRSP (the “RGMP RRSP”) with Richardson GMP (“RGMP”), of which Computershare Trust Company (“Computer- share”) was the trustee with RGMP acting as Computershare’s agent. 7 In May 2012, the Canadian government announced that it would be entering into a new tax treaty with New Zealand (the “New Treaty”), which would increase the withholding tax rate on RRSP withdrawals by New Zealand residents from 15% to 25%. As of the filing of Grenon’s Statement of Claim, the New Treaty was not yet in force. The New Treaty took effect June 26, 2015, and is applicable to income years com- mencing from 2016 on. 8 In or around 2007, the CRA began an extensive audit (the “Audit”) of Grenon and several corporations wholly owned by him. The Audit in- cluded activities related to the MFTs. 9 On April 24, 2012, the CRA issued a proposal letter (the “First Pro- posal Letter”) to Grenon. The First Proposal Letter was based on the general anti-avoidance Rule (“GAAR”) under the Income Tax Act (“ITA”) and proposed to assess tax of $157 million against the CIBC RRSP and $2.6 million against Grenon personally. 10 In the second half of 2012 and in February 2013, Grenon transferred $55 million from the CIBC RRSP to the RGMP RRSP. Grenon alleges he was required to do this because of changes in the RRSP rules regard- ing MFTs. He also asserts he did it to have cash available to pay the withholding tax that would become payable upon removal of funds from the CIBC RRSP to New Zealand. Grenon v. Canada Revenue Agency C. Dario J. 149

11 On February 8, 2013, the CRA issued a second proposal to Grenon (the “Second Proposal Letter”). This was similar to the First Proposal Letter but added additional interest and penalties, such that the tax pro- posed was $167 million against the CIBC RRSP and $3.8 million against Grenon. The Second Proposal Letter provided a 30 day period for Gre- non to respond. The Second Proposal Letter was sent to CIBC. In addi- tion, the CRA contacted CIBC and RGMP in respect of the potential tax liability. 12 On or about February 28, 2013, the CRA issued reassessments against Grenon and the CIBC RRSP. On March 1, 2013, the CRA issued replacement reassessments (the “Reassessments”) with additional penal- ties and interest. 13 One of the bases for the Reassessments was an allegation that the income of the MFTs within the CIBC RRSP represented an over-contri- bution by Grenon and was subject to a penalty tax. The Reassessments indicated tax owing of $283 million by the CIBC RRSP and $205 million by Grenon. 14 On March 7, 2013, on an ex parte basis, the CRA obtained from the Federal Court two jeopardy orders (the “Jeopardy Orders”), one against the CIBC RRSP and one against Grenon. I note that on September 9, 2015, the Federal Court allowed Grenon’s application for reconsideration of the RRSP Jeopardy Order and vacated it; see Minister of National Revenue v. Grenon (Trust of), 2015 FC 1050, [2016] 1 C.T.C. 197 (F.C.). The Federal Court noted that the Jeopardy Order against Grenon person- ally had been vacated by way of a Consent Order. 15 Grenon and CIBC formally objected to the Reassessments and ulti- mately were advised by the CRA Appeals Division that the Reassess- ments were confirmed. That confirmation has been appealed to the Tax Court of Canada. No disposition has been made as of the date of these Reasons. 16 Grenon asserts that, as a result of the Audit, the CRA and the CRA Personnel were “in a close and direct relationship” to Grenon and knew that “carelessness by them would likely have a close, direct and monu- mental effect” on Grenon. Accordingly, Grenon asserts that the CRA and the CRA Personnel owed a duty of care to him. 17 Grenon complains of a number of aspects of the CRA’s conduct. Spe- cific examples include: demanding large numbers of documents that Gre- non asserts the CRA knew were irrelevant, publicly available and/or so- licitor-client privileged; providing the Second Proposal Letter to CIBC 150 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

without prior notice to Grenon; and requiring production of a large num- ber of documents over the Christmas holiday of 2014 in advance of Gre- non’s cross-examination in respect of the Jeopardy Orders. 18 Grenon claims several heads of damages, including opportunity costs in respect of the assets of the CIBC RRSP and the RGMP RRSP, damage to his reputation and the difference in the amount of withholding tax in the event the New Treaty comes into force before he is able to remove the funds from the CIBC RRSP and the RGMP RRSP. He also seeks punitive and exemplary damages. 19 As indicated above, Grenon alleges various causes of action against the Defendants including negligence, misfeasance in public office and interference both with his contractual relations with CIBC and RGMP and with their fiduciary duties to him. He makes these allegations with considerable flourish, using terms such as “Extensive Improper Auditing Activities”, “Improper Collection Activities” and “CRA Shakedown Strategy”. I will give some consideration to the propriety of such lan- guage in the course of these Reasons, but the primary task of this Court is to determine whether the facts as alleged in the Statement of Claim, stripped of hyperbole, are sufficient to support one or more causes of action that are within the jurisdiction of this Court.

II. The Application 20 The Defendants’ application is brought pursuant to Rule 3.68, which provides, in part, as follows: 3.68(1)If the circumstances warrant and a condition under sub Rule (2) applies, the Court may order one or more of the following: (a) that all or any part of a claim or defence be struck out; (b) that a commencement document or pleading be amended or set aside; (c) that judgment or an order be entered; (d) that an action, an application or a proceeding be stayed. (2) The conditions for the order are one or more of the following: (a) the Court has no jurisdiction; (b) a commencement document or pleading discloses no reasona- ble claim or defence to a claim; (c) a commencement document or pleading is frivolous, irrele- vant or improper; Grenon v. Canada Revenue Agency C. Dario J. 151

(d) a commencement document or pleading constitutes an abuse of process; (e) an irregularity in a commencement document or pleading is so prejudicial to the claim that it is sufficient to defeat the claim. (3) No evidence may be submitted on an application made on the basis of the condition set out in sub Rule (2)(b). 21 The Defendants rely upon Rules 3.68(2)(a), (b), (c) and (e) in re- sisting the claims alleged by Grenon.

III. The Law 22 This Court has held that the test for striking a pleading under this Rule is the same as that under its predecessor Rule 129; see, for example, Donaldson v. Farrell, 2011 ABQB 11 (Alta. Q.B.) and Polsom v. Cous- ton, 2014 ABQB 43, 581 A.R. 342 (Alta. Q.B.). Accordingly, cases de- cided under the old Rule still may provide useful guidance. 23 It is commonly understood that, on an application to strike a pleading, the court must assume that the facts alleged in that pleading are true. In Fullowka v. Royal Oak Mines Inc. (1996), [1997] N.W.T.R. 1 (N.W.T. C.A.), the Court took a broad approach to this principle, holding at paras 39, 47: ...it is elementary that a pleading is valid and suffices to raise a cer- tain cause of action if it gives facts which create that cause of action. It need not name that or any cause of action or give a legal conclu- sion, and indeed it may name a different cause of action, or the wrong cause of action... All of the defendants who moved argue that the amended statement of claim at key places offers something bald and without supporting detail. Some counsel allege that these are bald facts, other that they are bald conclusions. Doubtless a statement of claim must plead the necessary facts, and a mere legal conclusion is not enough. Merely to plead that the defendant is liable to the plaintiff for the tort of defa- mation might well not suffice, for example. That is a legal conclu- sion, not a fact. However, there is a big difference between pleading a mere conclusion of law and pleading a fact. To plead that the de- fendant negligently injured the plaintiff is to plead a fact, even if it also implies a legal conclusion. 24 The latter statement seems surprisingly broad and, unfortunately, the Court did not elaborate on precisely what “fact” is contained in the 152 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

pleading referred to. Subsequent courts, however, have provided greater clarification. 25 For example, in Tottrup v. Alberta (Minister of Environment), 2000 ABCA 121, 255 A.R. 204 (Alta. C.A.) at paras 11 and 13, the Court of Appeal provided further guidance on the distinction between a fact and an allegation: In my view, it is not the allegation of a duty at law that is critical, but the facts alleged supporting such a duty. For example, a statement of claim alleging only that “A” breached a duty owed to “B” thereby causing damage does not, in my view, disclose a cause of action. Pleadings are allegations of fact and, in my view, where negligence is alleged, that allegation must be supported by facts capable of sus- taining a determination that a duty was owed, that an act or omission occurred breaching that duty, and that damages resulted. On a motion to strike it is the allegations of fact that must be examined to deter- mine whether a cause of action exists. ... It is an appropriate function of the Court to consider and determine these questions of law on the basis of the alleged facts. The existence of a duty of care, for example, may depend on the facts of the case, but whether certain facts could sustain a finding of such a duty is a question of law. It is therefore proper, in the circumstances of this case, to ask whether a duty of care and a breach of that duty by these Ministers could be found on the facts alleged by the plaintiff. The Court ought not to refuse to strike solely on the grounds that the facts may, at some later stage, turn out to be different from those alleged. 26 In Hovsepian v. Westfair Foods Ltd., 2001 ABQB 700, 296 A.R. 283 (Alta. Q.B.), this Court observed that Tottrup distinguished Fullowka and went on to narrow the application of the principle that the plaintiff’s alle- gations must be taken as true, saying at paras 28, 29 and 31: While the Plaintiffs state that all allegations in the Claim must be taken as proved, the Defendants propose two limits on that principle: (1) bare allegations with no facts need not be taken as proved; and (2) speculative facts or those incapable of proof need not be taken as proved. In my view, the Defendants are correct on both points. Regarding the first limitation argued by the Defendants, I agree that there is no presumption that allegations not backed by facts must be taken as proved. Bare allegations are insufficient; allegations of fact are taken as proved for purposes of the striking out test. ... Regarding the second limitation argued by the Defendants, they sub- mit that the court is not required to assume the truth of “allegations Grenon v. Canada Revenue Agency C. Dario J. 153

based on assumptions or speculations”, or facts that are “patently ri- diculous or incapable of proof”. These phrases come, respectively, from Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441 at 455, and Air India Flight 182 Disaster Claimants v. Air India et al. (1987), 62 OR. (2d) 130 (H.C.J.) at 135. 27 In Merchant Law Group v. Canada Revenue Agency, 2010 FCA 184, 405 N.R. 160 (F.C.A.) at paras 34 and 35, the Federal Court of Appeal, applying a similar Rule, cautioned against the injudicious use of oppro- brium in pleadings: I agree with the Federal Court’s observation (at paragraph 26) that paragraph 12 of the amended statement of claim “contains a set of conclusions, but does not provide any material facts for the conclu- sions.” When pleading bad faith or abuse of power, it is not enough to assert, baldly, conclusory phrases such as “deliberately or negli- gently,” “callous disregard,” or “by fraud and theft did steal”: Zundel v. Canada, 2005 FC 1612, 144 A.C.W.S. (3d) 635; Vojic v. Canada (M.N.R.), [1987] 2 C.T.C. 203, 87 D.T.C. 5384 (F.C.A.). “The bare assertion of a conclusion upon which the court is called upon to pro- nounce is not an allegation of material fact”: Canadian Olympic Association v. USA Hockey, Inc. (1997), 74 C.P.R. (3d) 348, 72 A.C.W.S. (3d) 346 (F.C.T.D.). Making bald, conclusory allegations without any evidentiary foundation is an abuse of process: AstraZeneca Canada Inc. v. Novopharm Limited, 2010 FCA 112 at paragraph 5. If the requirement of pleading material facts did not ex- ist in Rule 174 or if courts did not enforce it according to its terms, parties would be able to make the broadest, most sweeping allega- tions without evidence and embark upon a fishing expedition. As this Court has said, “an action at law is not a fishing expedition and a plaintiff who starts proceedings simply in the hope that something will turn up abuses the court’s process”: Kastner v. Painblanc (1994), 58 C.P.R. (3d) 502, 176 N.R. 68 at paragraph 4 (F.C.A.). To this, I would add that the tort of misfeasance in public office re- quires a particular state of mind of a public officer in carrying out the impugned action, i.e., deliberate conduct which the public officer knows to be inconsistent with the obligations of his or her office: Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263, 2003 SCC 69 at paragraph 28. For this tort, particularization of the allegations is mandatory. Rule 181 specifically requires particularization of allega- tions of “breach of trust,” “wilful default,” “state of mind of a per- son,” “malice” or “fraudulent intention.” 154 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

28 Graesser J of this Court made similar comments in L. (P.) v. Alberta, 2011 ABQB 771, 529 A.R. 1 (Alta. Q.B.) at paras 51 and 59: I must consider each paragraph and determine the extent to which the paragraph relates to a necessary element of a cause of action (alleg- ing a duty and a breach of that duty and the resulting harm) or how it relates to relevant or necessary facts supporting the cause of action. Sufficient, but not too many, particulars of the necessary facts must be given. Hence the tension between too little and too much. ... Using terms such as “maliciously” and “recklessly” is frivolous, ir- relevant and improper within the meaning of Rule 3.68(2)(c), and those adverbs should be struck. 29 As will be discussed later in these Reasons, Grenon asserts that there is precedent for his negligence claim. He argues, however, that even if that were not so, his claim is that the “novel” relationship between him and the CRA gives rise to a duty of care and it should not be struck. In NEP Canada ULC v. MEC OP LLC, 2014 ABCA 140, 572 A.R. 354 (Alta. C.A.) at paras 15 and 16, the Court of Appeal commented on the application of the striking Rule to “novel” claims: ... [R v Imperial Tobacco, 2011 SCC 42, [2011] 3 SCR 45] states that it is “not determinative” that a cause of action has not previously been recognized, but the opposite does not hold true; just because there is no “binding authority” does not mean that the claim has a reasonable prospect of success. Indeed, in Imperial Tobacco itself the challenged claims were all struck even though they were novel and there was no binding authority on the point. The test for striking pleadings is to be found in Imperial Tobacco, which is binding authority in this province. In determining whether a novel claim has a “reasonable prospect” of success, many factors must be examined. The clarity of the factual pleadings is important. The existence of case law discussing the same or similar causes of action is relevant. As noted in Imperial Tobacco, the courts must be careful not to inhibit the development of the common law by apply- ing too strict a test to novel claims. However, the courts must resist the temptation to send every case to trial, even if some legal analysis is needed to determine if a claim has any reasonable prospect of success: Kripps v. Touche Ross & Co. (1992), 94 DLR (4th) 284 at p. 309, 69 BCLR (2d) 62 (CA). 30 In Arabi v. Alberta, 2014 ABQB 295, 589 A.R. 249 (Alta. Q.B.) at paras 48, 72 and 74, this Court commented on the proper approach to a Grenon v. Canada Revenue Agency C. Dario J. 155

striking application where the pleading in question contains numerous and complex allegations: Arabi’s action is defective on many bases, cannot succeed, and there- fore must be struck. The amorphous nature of Arabi’s many allega- tions and the large cast of Defendants means that a detailed, point- by-point analysis is not a logistically viable process. I will therefore approach Arabi’s allegations by identifying a number of general legal and factual defects that, alone and in combination, mean the Arabi Civil Action cannot legally succeed or is based on an inadequate ma- trix of supporting facts. ... In evaluation of a Rule 3.68 application the hearing judge is to pre- sume that the alleged facts are true. This general Rule has two cave- ats. One is that a fact is different from a bald allegation: an allegation “...that recite[s] the basic elements of the tort in very general terms but fails to provide material facts sufficient to demonstrate an inten- tional wrongdoing...”: GH v. Alcock, 2013 ABCA 24 at para 58. For example, Arabi’s many allegations of a conspiracy among the De- fendants are a bald allegation — he offers nothing on the context or details of that conspiracy. ... A second basis on which an alleged fact may be rejected is when it is simply an absurdity, or highly implausible. Arabi’s complaints are also plagued by this defect of inherent improbability. ... 31 Finally, in HOOPP Realty Inc. v. Guarantee Co. of North America, 2015 ABCA 336 (Alta. C.A.) at paras. 14, 15 and 19, the Court of Ap- peal held that the judge hearing an application to strike should not parse the pleading too minutely: In so doing, the chambers judge was not to consider any evidence submitted in support. However, he or she was required to consider the contents of the entire pleading. Rule 3.68(3) states only that no evidence may be submitted on an application to strike for failure to disclose a reasonable claim. It does not state that when hearing an application to strike, the chambers judge is to examine only specific wording extracted from the statement of claim at the applicant’s dis- cretion; he or she must place that wording in the entire context of the pleading. At minimum, the relevant examination must logically extend beyond the specific words or paragraphs said to allege a cause of action. If other portions of the same pleading reveal a complete defence to that cause of action, the action may be struck. 156 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

... We conclude that the Rule 3.68(3) bar on considering evidence did not preclude the chambers judge from considering factors other than evidence, even when outside the contents of the Amended Statement of Claim. This Court concluded in O’Connor, supra at para 16 that many factors, short of evidence, must be examined in determining whether a novel claim has a “reasonable prospect of success”. We interpret this to include consideration of the underlying litigation context of a claim, even one which does not give rise to a novel cause of action. 32 From all of the foregoing case law, I draw the following statements of principle applicable to an application to strike. 1. The Court must assume the facts plead are true, but this assump- tion does not extend to bald allegations, to legal conclusions or to speculations, absurdities, highly implausible statements or state- ments incapable of proof. 2. Making conclusory statements without evidence is an abuse of process and such statements should be struck. 3. Improper reference to terms such as “maliciously” and “reck- lessly” also constitutes an abuse of process and such terms should be struck unless they are relevant to the cause of action alleged. 4. Where a plaintiff’s statement of claim includes contradictory facts that cannot both be true, such contradictory allegations need not be accepted by the Court. I consider this a variant of the “defect of inherent improbability” discussed in Arabi. 5. The Court is not obligated to assume that an alleged fact is true where that allegation is contrary to a statutory directive. For ex- ample, s. 152(8) of the ITA deems tax assessments to be valid until varied or set aside by the Tax Court of Canada and this Court need not, and indeed cannot, presume otherwise, regardless of what is contained in the Statement of Claim. 33 There may be additional bases upon which the Court ought properly to reject a plaintiff’s allegations of “fact”; the categories are not closed. 34 Finally, while the Court should not be quick to dismiss novel claims, the entire contents and context of a pleading must be considered and a minute, line-by-line analysis may not be appropriate. Grenon v. Canada Revenue Agency C. Dario J. 157

IV. Analysis 35 On the basis of the above-stated principles and given that Grenon’s Statement of Claim, like that in Arabi, is lengthy, complex and raises a large number of issues, I will consider this application on the basis of the objections raised by the CRA, rather than by reviewing the Statement of Claim paragraph by paragraph.

A. Jurisdiction/Collateral Attack 36 The CRA argues that certain paragraphs of the Statement of Claim speak to issues that are outside the jurisdiction of this Court and should be struck pursuant to Rule 3.68(2)(a).

1. Issues Belonging in Tax Court 37 First, the CRA asserts that the Statement of Claim invites this Court to make some determination with respect to the validity or accuracy of the Reassessments. They point out that s. 152(8) ITA provides that tax assessments are valid and binding unless and until they are varied or set aside pursuant to the objection and appeal process set out in the ITA. That process must be followed in the Tax Court of Canada, which has exclusive jurisdiction to determine the validity of tax assessments pursu- ant to s. 12(1) of the Tax Court of Canada Act, RSC 1985, c T-2: 12.(1) The Court has exclusive original jurisdiction to hear and deter- mine references and appeals to the Court on matters arising under ... the Income Tax Act ... when references or appeals to the Court are provided for in those Acts. 38 In his brief, Grenon refers to the Supreme Court of Canada’s decision in Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585 (S.C.C.). He asserts that “The TeleZone decision has over- taken any notion that the TCC must rule on the Reassessments before this action can be continued.” 39 In my view, Grenon has misapprehended and over interpreted TeleZone. It is important to bear in mind that TeleZone was not a tax case. Rather, what was at issue there was a decision by the Minister of Industry Canada to reject TeleZone’s application for a telecommunica- tions license. It is true that the Supreme Court held that judicial review of that ministerial decision was not a necessary precursor to TeleZone’s ac- tion for damages, saying at para. 19: If a claimant seeks to set aside the order of a federal decision maker, it will have to proceed by judicial review, as the Grenier court held. 158 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

However, if the claimant is content to let the order stand and instead seeks compensation for alleged losses (as here), there is no principled reason why it should be forced to detour to the Federal Court for the extra step of a judicial review (itself sometimes a costly undertaking) when that is not the relief it seeks. Access to justice requires that the claimant be permitted to pursue its chosen remedy directly and, to the greatest extent possible, without procedural detours. [Emphasis added.] 40 There are two features that distinguish this case from TeleZone. One is the applicable statutory regime and the other is that Grenon, unlike the claimant in TeleZone, is not “content to let the order stand”. 41 First, the statutory framework in this case is significantly different from that before the Supreme Court in TeleZone. In TeleZone, the ques- tion was whether an action for damages could proceed in the Ontario superior court without prior judicial review of the ministerial decision by the Federal Court. In respect of jurisdiction, the Supreme Court made these comments at paras. 6 and 42: In the present case, the Ontario Superior Court has jurisdiction over the parties, the subject matter and the remedies sought by TeleZone. That jurisdiction includes the authority to determine every legal and factual element necessary for the granting or withholding of the rem- edies sought unless such authority is taken away by statute. The Fed- eral Courts Act does not, by clear and direct statutory language, oust the jurisdiction of the provincial superior courts to deal with these common law and equitable claims, including the potential “unlawful- ness” of government orders. That being the case, the Superior Court has jurisdiction to proceed. ... What is required, at this point of the discussion, is to remind our- selves of the Rule that any derogation from the jurisdiction of the provincial superior courts (in favour of the Federal Court or other- wise) requires clear and explicit statutory language. ... 42 The Supreme Court then went on at para. 57 to consider the legisla- tive history of s. 17 of the Federal Courts Act, RSC 1985, c F-7, which gives the Federal Court “concurrent original jurisdiction in all cases in which relief is claimed against the Crown” (emphasis added). The Su- preme Court noted that the intention of changes to the Federal Courts Grenon v. Canada Revenue Agency C. Dario J. 159

Act was for the Federal Court and the provincial superior courts to share jurisdiction over certain matters; they stated at para. 59: The effect of the argument of the Attorney General, if accepted, would be to undermine the purpose and intended effect of the 1990 amendment by retaining in the Federal Court exclusive jurisdiction over a key element of many causes of action proceeding in the pro- vincial courts despite the promise to give plaintiffs a “choice of fo- rum” and to make available relief in the provincial superior courts that may be more “familiar” to litigants. 43 In contrast to the Federal Court’s concurrent jurisdiction in the cir- cumstances articulated in TeleZone, the Tax Court, as noted above, has exclusive jurisdiction over assessments of tax. This jurisdiction has been interpreted rather broadly by the courts. For example, in Addison & Leyen Ltd. v. Canada, 2007 SCC 33, [2007] 2 S.C.R. 793 (S.C.C.), the Supreme Court said at para 11: Reviewing courts should be very cautious in authorizing judicial re- view in such circumstances. The integrity and efficacy of the system of tax assessments and appeals should be preserved. Parliament has set up a complex structure to deal with a multitude of tax-related claims and this structure relies on an independent and specialized court, the Tax Court of Canada. Judicial review should not be used to develop a new form of incidental litigation designed to circumvent the system of tax appeals established by Parliament and the jurisdic- tion of the Tax Court. Judicial review should remain a remedy of last resort in this context. 44 In a number of recent cases, the Federal Court has refused to deal with an application on the grounds that its “essence” or “essential charac- ter” was a challenge to or collateral attack on the validity of a tax assess- ment and was therefore within the exclusive jurisdiction of the Tax Court. See, for example, Ritter v. Minister of National Revenue, 2013 FC 411, [2013] 4 C.T.C. 145 (F.C.); Newcombe v. R., 2013 FC 955, [2014] 1 C.T.C. 58 (F.C.); Feng v. Minister of National Revenue, 2016 FC 66 (F.C.). 45 Notwithstanding Grenon’s argument that TeleZone obviates the need for parallel proceedings, such proceedings subsequently were before the Federal Court of Appeal in the companion cases Johnson v. Minister of National Revenue, 2015 FCA 51, 469 N.R. 326 (F.C.A.) (“Johnson 1”) and Johnson v. R., 2015 FCA 52, 470 N.R. 183 (F.C.A.) (“Johnson 2”). In both of those cases, the taxpayer alleged that the Minister had acted improperly in issuing GST assessments; the same conduct was at issue in 160 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

both cases. In Johnson 1, the taxpayer sought judicial review of the Min- ister’s conduct by the Federal Court. He also appealed the assessments to the Tax Court and Johnson 2 pertained to the CRA’s application to strike paragraphs of the notice of appeal dealing with the Minister’s alleged conduct. The Tax Court struck the paragraphs and the Federal Court re- fused judicial review. The taxpayer appealed, but the Federal Court of Appeal upheld both judgments, holding in Johnson 1 at para 38 that it was not possible to separate the requested declaration of invalidity from the question of the correctness of the assessments. The Federal Court of Appeal cited Roitman v. R., 2006 FCA 266, 353 N.R. 75 (F.C.A.) at para 25 for these comments: Counsel for Mr. Roitman alleges abuse of process on the part of the Minister in issuing the notice of assessment. The alleged abuse is that of a deliberate incorrect interpretation of the law. The allegation as- sumes that the law has been incorrectly interpreted, which in turn assumes that the reassessment is invalid, a determination that can only be made by the Tax Court of Canada. To paraphrase the words of Hugessen J. in Walsh, [2006] F.C.J. No. 54 (supra, at paragraph 5), the relief based on the alleged deliberate actions of the Minister or of the Agency “would be a meaningless exercise when divorced, as is [sic] must be, from the substantial question as to the validity of the assessment itself”. It is remarkable that the very question the Judge ordered to be decided prior to trial by the Federal Court is precisely the type of legal question that would normally fall within the very expertise and domain of the Tax Court of Canada. It is clear in the end that the claim for damages can only succeed if the reassessment is first found to be invalid. The Statement of Claim is, at best, premature. 46 I note that Grenon attempts to undermine Roitman on the basis that it was decided prior to TeleZone. Given the different statutory regimes at issue here and in TeleZone and given the Federal Court of Appeal’s re- cent reference to Roitman in Johnson 1, I find that Roitman has not been overruled by TeleZone. 47 Second, unlike the claimant in TeleZone, it is clear that Grenon is not “content to let the order stand” insofar as the Reassessments are con- cerned. He has appealed the Reassessments to the Tax Court, though the outcome of that appeal is not yet known. Moreover, it is abundantly clear from his Statement of Claim that he believes the Reassessments are inva- lid. Indeed, he says so explicitly and several of his claims are predicated on the assumption that the Reassessments are invalid. Grenon v. Canada Revenue Agency C. Dario J. 161

48 Grenon points to the decision in Ludmer v. Canada (Attorney Gen- eral), 2015 QCCS 1218 (C.S. Que.), in which there were concurrent pro- ceedings in the Tax Court, the Federal Court and the Superior Court, all arising out of the same factual circumstances. There had been several tax assessments against a number of taxpayers, most of which had been resolved by consent. Only a few remained to be determined by the Tax Court. The Quebec Court discussed the concurrent jurisdiction at para 13: This is not a case where the different courts or bodies are exercising concurrent jurisdiction over the same dispute. Rather, the different courts or bodies each have jurisdiction over different aspects of the dispute. 49 At para 18, the Court referred to TeleZone and held that “...the Supe- rior Court’s jurisdiction to award damages is not dependent on a prior finding by the Tax Court that the assessment was incorrect...”. The Court also pointed out in paras 31 and 32, however, that the issues before the Superior Court, the Tax Court, the Federal Court and the Information Commissioner were related, but different and that the outcome in the Su- perior Court did not depend “in large part” on the outcome of the other proceedings. The Superior Court stated at para 36 that “The Tax Court’s determination to maintain, vary or vacate the reassessments will be bind- ing on the Superior Court. The incorrectness of the tax reassessments as a matter of substantive tax law is not, however, an essential element of the Plaintiffs’ claim.” 50 By contrast, several of Grenon’s claims do depend “in large part” on invalidity of the Reassessments. Invalidity of the Reassessments is an “essential element” of those claims. While, in principle, this Court may be the correct forum in which to adjudicate claims for which the validity of the Reassessments forms an essential element, such adjudication can- not take place until the validity of the Reassessments is determined by the Tax Court. As such, Ludmer is of limited assistance to Grenon. 51 Accordingly, I find that allegations in Grenon’s Statement of Claim that pertain to, or constitute a collateral attack on, the Reassessments must be struck as being within the exclusive jurisdiction of the Tax Court of Canada. I note that the Supreme Court of Canada at para. 60 of TeleZone approved the definition of “collateral attack” as “an attack made in proceedings other than those whose specific object is the rever- sal, variation, or nullification of the order or judgment”. While the Reas- 162 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

sessments are not an “order or judgment”, I am satisfied that the doctrine of collateral attack is applicable to this context. 52 Paragraph 41 of the Statement of Claim alleges that the Reassess- ments were “improper, unlawful, and invalid” for various reasons. Leav- ing aside that these are legal conclusions, not facts, s. 152(8) of the ITA provides that a tax assessment is valid and binding until set aside in ac- cordance with the appropriate procedure. Thus, Grenon asks this Court to accept as true a statement that is contrary to statute. This Court cannot do so and, indeed, is obliged to do the opposite. Further, it is clear that the question of the validity of the Reassessments is within the exclusive ju- risdiction of the Tax Court. Accordingly, this paragraph raises no issue that can be determined by this Court and is struck.

2. Issues Belonging in the Federal Court 53 The CRA also argues that this Court has no jurisdiction to review the validity of the Jeopardy Orders. I agree with this general proposition. Concerns with respect to the Jeopardy Orders must be brought before the Federal Court, as the court that granted them. Indeed, this has already occurred. As noted above, the Jeopardy Order against Grenon personally was vacated by a Consent Order of the Federal Court. That Court also set aside the RRSP Jeopardy Order in its decision in Grenon, supra, making these comments at paras 24, 26 and 27: As argued at the hearing, what the MNR observed when the applica- tion for the ex parte jeopardy order was filed were substantial assets were being withdrawn in a relatively short time frame from the Trust, some of it moving to overseas accounts. ... While the transfers from the Trust and the relocation of Mr. Grenon may have provided an initial impression that the Trust had the poten- tial to be hollowed out before an opportunity for collection arose, upon hearing submissions from all the parties and reviewing their ev- idence, I do not believe that the MNR has shown reasonable grounds to believe that the assets of the taxpayer are currently in danger of debt collection. Informing my view is not only that the Trustee would be jointly lia- ble if the assets of the taxpayer were distributed such that the assets would be less than the tax debt (section 159(1)(a)), but also that pur- suant to section 159(2), the Trustee would need to obtain a “clear- ance certificate” prior to distributing assets for a tax debt which it may be reasonably expected to become liable... Grenon v. Canada Revenue Agency C. Dario J. 163

54 These comments from the Federal Court undermine certain aspects of Grenon’s arguments. First, Grenon asserts that the CRA “improperly, quickly and secretly” obtained the Jeopardy Orders when it knew there was “no legitimate basis” for doing so. This is not consistent with what the Federal Court said. Notwithstanding that the Federal Court vacated the RRSP Jeopardy Order, its findings above do not support the assertion of mala fides on the part of the CRA. The Federal Court seems to indi- cate that there was a reasonable basis for the CRA to have obtained the RRSP Jeopardy Order at the first instance. Second, it is significant that the Federal Court was prepared to vacate the RRSP Jeopardy Order on the strength of the potential for trustee liability under s. 159(2) ITA, the very provision of which Grenon complains in the present action. 55 Grenon’s allegations regarding the Jeopardy Orders amount to an as- sertion that the CRA misused the process of the Federal Court. In re- viewing these allegations, it is important to bear in mind the distinction between the doctrine of abuse of process, which is relevant to jurisdic- tion, and the tort of abuse of process, which will be discussed later in these Reasons. 56 The doctrine of abuse of process was discussed at some length by McIntyre J of this Court in Stoney Nakoda Nations v. Canada (Attorney General), 2015 ABQB 565 (Alta. Q.B.). At para 19, he quoted the Su- preme Court of Canada in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (S.C.C.) for this explanation of the doctrine: The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute... 57 In Magno v. Lariviere, 2014 ONSC 705 (Ont. S.C.J.) at para 25, the Court quoted para 43 of that same Supreme Court of Canada decision: [T]he primary focus of the doctrine of abuse of process is the integ- rity of the adjudicative functions of courts. Whether it serves to dis- entitle the Crown from proceeding because of undue delays or whether it prevents a civil party from using the courts for an im- proper purpose the focus is less on the interest of parties and more on the integrity of judicial decision making as a branch of the adminis- tration of justice. 58 Justice McIntyre held in Stoney at para 23 that a litigant’s “entire court history” is relevant to the abuse of process analysis. But it is clear 164 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

from the case law that what is relevant for this purpose is the history of court proceedings rather than out-of-court conduct. 59 While the Federal Court is a statutory court, there is no suggestion that it does not have the authority to assert control over its own process. See, for example, AB Hassle v. Apotex Inc., 2005 FC 234, [2005] 4 F.C.R. 229 (F.C.) and Tractor Supply Co. of Texas L.P. v. TSC Stores L.P., 2009 FC 154, 341 F.T.R. 157 (Eng.) (F.C.), aff’d 2009 FCA 352, 399 N.R. 1 (F.C.A.). Accordingly, issues pertaining to abuses of the pro- cess of the Federal Court must be addressed in that Court. This Court has no jurisdiction over such allegations. 60 Paragraphs 43, 44 and 45 all pertain to this alleged misconduct on the part of the CRA in obtaining the Jeopardy Orders ex parte. The Federal Court’s decision does not support such an allegation. In any event, that is a matter for the Federal Court, not this Court, and these paragraphs are struck. 61 Paragraphs 54, 56, 57 and 58 pertain to the documents the CRA de- manded in the course of the dispute over the Jeopardy Orders and to the cross-examination of Grenon in respect of the Jeopardy Orders. Grenon alleges in paragraph 57 that the CRA’s actions were a “malicious and abusive misuse and perversion of the court process”. Any abuse of the process of the Federal Court should be addressed before that Court. See, for example, Trans-Pacific Shipping Co. v. Atlantic & Orient Trust Co., 2005 FC 311 (F.C.) and Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., 2011 FC 247, 92 C.P.R. (4th) 76 (F.C.). Those paragraphs are struck. 62 Similarly, paragraph 70 deals with the evidence the CRA put before the Federal Court on its application for the Jeopardy Orders. This is not within this Court’s jurisdiction and is struck. 63 Paragraphs 73(b), (d), and (e) further pertain to the Federal Court pro- cess and are not within the jurisdiction of this Court. They are struck. 64 Notwithstanding its inherent equitable jurisdiction, this Court should not tread upon those areas where the Federal Court is entitled to control its own process.

B. No Reasonable Cause of Action 65 Rule 3.68(2)(b) provides that a commencement document or portion thereof may be struck out where it discloses no reasonable claim. As the above case law demonstrates, a court will find that there is no reasonable Grenon v. Canada Revenue Agency C. Dario J. 165

claim when the alleged claim has no reasonable prospect of success. The CRA asserts that this is the case in respect of several of Grenon’s claims.

1. Inducing Breach of Contractual Relations and Fiduciary Duty 66 Several of Grenon’s claims pertain to the CRA’s alleged interference in his relations with CIBC and RGMP, in their capacities as trustees of the RRSP Trusts. He states as follows at paragraph 20 of the Statement of Claim: At all material times, the trustee of the CIBC RRSP was the CIBC Trust Company, who through its agents, CIBC Wood Gundy or CIBC World Markets Inc. (collectively “CIBC”), administered the CIBC RRSP. Mr. Grenon also had a banking and brokerage relation- ship with CIBC throughout most of 2012 and for many years prior. In administering the CIBC RRSP and acting as Mr. Grenon’s bank, CIBC owed duties to Mr. Grenon, including fiduciary and contrac- tual obligations. Among other things, those duties required CIBC to administer the RRSP Trust at all times in accordance with Mr. Gre- non’s best interests, and not to act in self-interest. In addition, the CIBC owed fiduciary and contractual duties to apprise Mr. Grenon of the conduct of and communications with the CRA Personnel. The CRA and CRA Personnel were at all material times aware of these duties owed by CIBC to Mr. Grenon. 67 At paragraph 21 of the Statement of Claim, similar fiduciary and con- tractual obligations are described in respect of RGMP. 68 At paragraph 27(b), Grenon claims that the CRA interfered with his relationship with CIBC by demanding documents from it in the course of the Audit. It is clear from the Statement of Claim itself that the Audit and the resulting Reassessments pertained not only to Grenon personally, but also to the RRSPs. As trustee of the CIBC RRSP, CIBC would have been in possession of the relevant documents. A trust is a taxpayer for income tax purposes and CIBC’s obligations as trustee would have included fil- ing tax returns for the CIBC RRSP. The CRA is statutorily obligated to administer the ITA and statutorily entitled to conduct audits of taxpayers, including trusts, in so doing. The CRA seeking documents from a trustee in the course of an audit of a trust does not found a cause of action. This paragraph is struck. 69 In paragraph 49, Grenon alleges that the CRA “refused to advise CIBC that CIBC would not be held personally liable for any taxes of the CIBC RRSP”. The potential for liability on the part of CIBC, as trustee of the CIBC RRSP, arises from s. 159(1) ITA. The CRA has no discre- 166 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

tion to waive or otherwise obviate such liability. Therefore, the CRA’s refusal to breach, misstate or ignore the provisions of the ITA cannot give rise to a cause of action. This paragraph is struck. 70 In paragraphs 63 and 64, Grenon alleges the CRA induced CIBC and RGMP to breach their fiduciary and contractual obligations by sending the Second Proposal Letter and the Reassessments to them and by other- wise impeding them from allowing Grenon to withdraw funds from the RRSPs. These paragraphs disclose no cause of action. Section 159 of the ITA provides for liability on the part of a trustee who distributes property in its possession or control to a taxpayer who “can reasonably be ex- pected to become liable” under the ITA. Again, for purposes of this ap- plication, the Reassessments are deemed valid per s. 152(8) of the ITA. Further, even if the CRA had not put CIBC and RGMP on notice of the potential tax liability, a trustee faces personal liability if it fails to obtain a clearance certificate pursuant to s. 159(2) ITA prior to distribution. It is clear that trustees are obligated to comply with the law notwithstanding that such compliance may affect the beneficiaries’ interests. See, for ex- ample, National Trust Co. v. R. (1998), 98 D.T.C. 6409 (Fed. C.A.). Therefore, these paragraphs are struck.

2. Negligence 71 Grenon alleges negligence on the part of the CRA. One element a plaintiff is required to prove to establish negligence is a duty of care. The case law, as set out below, establishes that the existence of such a duty of care requires both foreseeability of harm and proximity between the par- ties. Grenon asserts that the CRA owed him a duty of care arising from the “close and direct relationship and proximity” between him and the CRA as a result of the Audit. 72 Grenon relies on the decision of the British Columbia Supreme Court in Leroux v. Canada Revenue Agency, 2014 BCSC 720, [2014] 6 C.T.C. 71 (B.C. S.C.). The Court in that case conducted the Cooper-Anns analy- sis that originated in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 (S.C.C.) and Anns v. Merton London Borough Council (1977), [1978] A.C. 728 (U.K. H.L.). The Court in Leroux concluded that there was a relationship of sufficient proximity between the taxpayer and the CRA to give rise to a duty of care, making these comments at paras. 273 and 284: In [Odhavji Estate v Woodhouse, 2003 SCC 69], the court clarified that more is required for a duty of care to exist than simply foresee- Grenon v. Canada Revenue Agency C. Dario J. 167

ability of harm. There must be a sufficient degree of proximity be- tween the parties so that a prima facie duty of care is established. The relationship must be such that the defendant may be said to be under an obligation to be mindful of the plaintiff’s legitimate interest in conducting his or her affairs (Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165). ... The court [in Hill v Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41, [2007] 3 SCR 129] said the most basic factor for proximity is whether the defendant ought to have had the plaintiff in mind as a person potentially harmed by its actions. A personal relationship is not required, but if a person is singled out for investi- gation, a close and direct relationship is created (see para. 33). In Hill, the targeted suspect had a critical personal interest in the con- duct of the investigation; his freedom was at stake. Torts of false ar- rest, false imprisonment and malicious prosecution did not provide an adequate remedy. To fail to provide a remedy for “very poor per- formance of important police duties” and other “non-malicious cate- gories of police misconduct” would be to deny justice. The court noted that unreasonable and careless police conduct can lead to wrongful convictions, and such a duty of care is also consistent with Charter values. 73 It is noteworthy that the cases cited by the Court in Leroux dealt with criminal investigations, not administrative investigations. The Court in Leroux acknowledged at para 298 that any duty of care on the part of a public officer must be determined in the context of that officer’s man- date. The Court stated at paras 300 and 301 that the courts have repeat- edly refused to find a private law duty of care between the CRA and taxpayers and that, in the vast majority of cases, an audit may not give rise to the degree of proximity necessary to found such a duty of care. At para 300, the Court distinguished Mr. Leroux’s claim from other cases on the basis that the “huge penalties” involved in his case were sufficient to found a duty of care, but ultimately held that the CRA was not liable because Mr. Leroux had failed to prove that the standard of care had been breached or that his damages were caused by CRA negligence. 74 Grenon asserts that the reasoning in Leroux was endorsed by the On- tario Court of Appeal in McCreight v. Canada (Attorney General), 2013 ONCA 483 (Ont. C.A.). 75 In McCreight, the Court of Appeal reversed a decision of the motions judge striking a negligence claim against the CRA. In that case, the CRA was investigating the use of research and development credits by several 168 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

corporate taxpayers. In the course of so doing, the CRA seized various documents from the taxpayers’ accounting firm. Shortly before the docu- ments were required to be returned, the CRA obtained approval from the Department of Justice to lay an information charging various taxpayers and their advisors, including McCreight and another employee of the ac- counting firm, with fraud and conspiracy under the ITA and the Criminal Code. The individual accountants subsequently were discharged and brought proceedings against the CRA, alleging that they were charged so that the CRA could keep the seized documents. The Court of Appeal held as follows at paras 58, 59, 61 and 62: Foreseeability is conceded by the respondents in this case. The factors to be considered in an analysis of whether the plaintiff and defendant are in a relationship of proximity are diverse and de- pend on the circumstances of the case. The categories of proximate relationships are not closed. In looking at the relationship between the parties, the focus is on whether the acts of the alleged wrongdoer 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: Hamilton-Wentworth, at para. 29. ... Firstly, given the Supreme Court’s ruling in Hamilton-Wentworth that, in certain circumstances, police officers may owe a duty of care to their suspects, surely it is not plain and obvious that a CRA inves- tigator owes no such duty when operating under ITA provisions that attract criminal sanction and under the Criminal Code. The same an- alogical reasoning applies to any residual policy rationale that could negate such a duty. Secondly, I see no relevant distinction between the above-cited case of Leroux and this case. That case that [sic] involved a claim of neg- ligence against CRA employees as well and the British Columbia Court of Appeal dismissed an appeal of an order permitting the cause of action to proceed to trial. The Court was not persuaded that the claim should be struck because it was at least arguable that such a cause of action could succeed and the issue was to be considered at trial. 76 I do not think McCreight is of assistance to Grenon. He points to the Court of Appeal’s comment that there was “no relevant distinction” be- tween that case and Leroux. With respect, I do not agree. The individual accountants in McCreight were facing charges under both the ITA and the Criminal Code. In my view, the possibility of criminal sanction dis- tinguishes the matter from an audit and makes it more analogous to the Grenon v. Canada Revenue Agency C. Dario J. 169

criminal investigation at issue in Hamilton-Wentworth. I do not interpret McCreight as authority that the relationship of proximity necessary to a duty of care is established by the existence of an audit, however exten- sive, in the absence of the element of criminal investigation. 77 Grenon also refers to Scheuer v. Canada Revenue Agency, 2015 FC 74, [2015] 2 C.T.C. 135 (F.C.), in which the Federal Court refused to strike a claim in negligence against the CRA. The Court referred to Le- roux, saying at para. 30 “Where Leroux is currently under appeal, and may resultantly be nuanced or reversed by the Court of Appeal, the case nonetheless establishes that these issues are arguable ones, and that the claims are not necessarily bound to fail...” 78 I note, however, that that decision was overturned by the Federal Court of Appeal: Scheuer v. Canada Revenue Agency, 2016 FCA 7 (F.C.). The Court of Appeal maintained at para 30 that there is “no cate- gory of recognized cases that supports the plaintiffs’ assertion that the Canada Revenue Agency owed a duty of care to all Canadians when is- suing tax shelter numbers”. The Court of Appeal reiterated that perform- ance of statutory duties, without more, does not give rise to private law duties of care. They stated that “Something more must be alleged to bring the claim within one of the above enumerated classes or an analo- gous one: for example, misfeasance in public office or acting in a manner inconsistent with the proper and valid exercise of the powers conferred upon the Canada Revenue Agency under the [ITA].” 79 The Court of Appeal also made these comments at paras 36 and 40: I need not consider whether the Judge erred in finding that the allega- tions contained in the amended statement of claim were sufficient at law, for the purpose of a motion to strike, to assert a prima facie duty of care arising from “proximity by interaction”. This is because, in my respectful view, the Judge erred in law by failing to give suffi- cient consideration to the relevant provisions of the Income Tax Act. ... Returning to the application of the Cooper-Anns test, at the second part of the first stage of the test, a court is to ask whether, notwith- standing the proximity between the parties, there are reasons such that tort liability should not be recognized. Had the Judge considered the legislative regime at this stage of the analysis, he would have concluded that no tort liability can, or should, be imposed upon the Minister for simply issuing a tax shelter identification number be- cause, in so acting, the Minister exercises no discretion. Once satis- fied that the prescribed information has been provided, that the un- 170 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

dertaking to keep the books and records is satisfactory and that the books and records will be kept and retained at a satisfactory place, the Minister must issue the identification number. No duty of care can arise from the issuance of an identification number in this circumstance. 80 While the Federal Court of Appeal’s reasoning was specific to the tax shelter provisions of the ITA, Scheuer cannot be taken as an endorsement of the reasoning and result in Leroux. At a minimum, Scheuer indicates that Leroux has no application in circumstances where the CRA has no discretion. 81 The CRA’s position is that CRA officials undertaking assessment and collection activities do not owe a duty of care to individual taxpayers. Rather, their duty is to the Minister of National Revenue and to Canadi- ans as a whole to enforce the terms of the ITA. They referred to the Cooper-Anns test and cited numerous cases in support of their position. See, for example, Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 (S.C.C.); Los Angeles Salad Co. v. Canadian Food Inspection Agency, 2013 BCCA 34, 40 B.C.L.R. (5th) 213 (B.C. C.A.); Canus Fisheries Ltd. v. Canada (Customs & Revenue Agency), 2005 NSSC 283, 237 N.S.R. (2d) 166 (N.S. S.C.); 783783 Alberta Ltd. v. Canada (Attorney General), 2010 ABCA 226, 482 A.R. 136 (Alta. C.A.); and Foote v. Canada (Attorney General), 2011 BCSC 1062, 2011 D.T.C. 5139 (Eng.) (B.C. S.C. [In Chambers]). 82 I am satisfied that the weight of authority is that the CRA, in con- ducting an audit, is not in a relationship of sufficient proximity with an individual taxpayer to give rise to a duty of care. There was no such duty in Scheuer, McCreight is distinguishable on its facts, and Leroux is, with respect, an outlier which is not binding upon this Court. The Court in Leroux appears to have been swayed by the “huge penalties” assessed against the plaintiff. I am concerned that basing the proximity analysis on the quantum of penalties assessed is not a principled approach to deter- mining whether a duty of care exists. In Hamilton-Wentworth, where the individual’s liberty was at stake, the case was much clearer, but relying on the quantum of monetary penalties adds an inappropriately subjective element to the tort analysis. What is a “huge” penalty to one taxpayer may not be to another. I do not consider this a proper factor to be taken into account in the proximity analysis. Therefore, I decline to follow Le- roux. In my view, absent exceptional circumstances giving rise to a rela- tionship of proximity, there is no duty of care. The existence of an audit is not such an exceptional circumstance. Grenon v. Canada Revenue Agency C. Dario J. 171

83 I am aware that the Quebec Court of Appeal recently upheld a large award, including punitive damages, against the Agence du revenu du Quebec, the CRA’s Quebec counterpart; see Qu´ebec (Agence du revenu) c. Groupe Enico inc., 2016 QCCA 76 (C.A. Que.). That decision is dis- tinguishable from the present case because it turned on the duty of good faith that forms part of Quebec’s Civil Code, which states at s. 7: 7. no right may be exercised with the intent of injuring another or in an excessive and unreasonable manner, and therefore contrary to the requirements of good faith. 84 Interestingly, this provision seems to me to speak more to misfea- sance or abuse of power than to negligence per se. In any event, Parlia- ment has not seen fit to enact a corresponding statutory duty on the part of the CRA and it is not within this Court’s jurisdiction to do so. It is true that the CRA has broad authority and considerable enforcement powers. It must be remembered, however, that those powers arise from the ITA and express the will of Parliament. Should Parliament wish to temper the CRA’s authority by imposing a duty of care, it may do so. It is not appro- priate for this Court to attempt to achieve that result through an unprinci- pled application of the law of negligence. 85 In the absence of either a statutory duty or appellate authority finding such a duty at common law, I find that there is no such duty of care at law and Grenon’s claims based on the existence of such a duty have no reasonable prospect of success. 86 In paragraph 65 of the Statement of Claim, Grenon asserts that there was a relationship of proximity between him and the CRA as a result of the Audit. In view of the foregoing analysis, this assertion cannot be sus- tained and this paragraph is struck. 87 In paragraphs 66 and 67, Grenon asserts a duty of care on the part of the CRA and various CRA Personnel. For the same reasons that the CRA does not owe a duty to Grenon, neither do the CRA Personnel. There- fore, these paragraphs are struck. 88 In paragraphs 68 and 69, Grenon alleges breaches of a duty of care and failures to meet the necessary standard of care. As I have found that there is no such duty of care, these paragraphs are struck. 89 In paragraph 71, Grenon alleges foreseeability of damages in the event of negligence by the CRA. As I have found there is no duty of care, this paragraph cannot support a cause of action and is struck. In addition, many of the claimed heads of damages appear to be speculative at best. 172 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

3. Misfeasance in Public Office 90 In the Statement of Claim, Grenon accuses the CRA Personnel of misfeasance in public office. He asserts that the CRA engaged in deliber- ate unlawful conduct and knew of or was reckless as to the harm that would result to Grenon from such conduct. 91 The leading case on this intentional tort is Odhavji Estate v. Wood- house, 2003 SCC 69, [2003] 3 S.C.R. 263 (S.C.C.), in which Iacobucci J held at para 23 that the tort comprises two elements. First, the public officer must have engaged in deliberate and unlawful conduct in his or her capacity as a public officer and second, the officer must have been aware both that his or her conduct was unlawful and that the conduct was likely to harm the plaintiff. Justice Iacobucci enumerated as Category A and Category B two ways in which these elements can be established. In Category A, the conduct is specifically intended to injure the plaintiff. In Category B, a public officer acts with knowledge both that he or she has no power to do the act complained of and that the act is likely to injure the plaintiff. 92 To this I would add these comments made by the Court of Queen’s Bench in Gray v. Canada (Attorney General), 2012 NBQB 375, 397 N.B.R. (2d) 112 (N.B. Q.B.) at paras 86 and 87: It is important to note that the Supreme Court’s characterization of misfeasance in public office in Odhavji excluded liability for the in- advertent or negligent discharge of one’s obligations. Establishment of the tort requires something more akin to malice. The fact that the official knew harm would result to the plaintiff as a result of his ac- tions is not enough to establish liability; the officer must also deliber- ately engage in conduct that he knows is unlawful. As stated at para. 28 of Odhavji: 28 (...) The requirement that the defendant must have been aware that his or her conduct was unlawful reflects the well-established principle that misfeasance in public office requires an element of “bad faith” or “dishonesty”. In a democracy, public officers must retain the authority to make decisions that, where appropriate, are adverse to the interests of certain citizens. Knowledge of harm is thus an insufficient basis on which to conclude that the defendant has acted in bad faith or dishonestly. A public officer may in good faith make a decision that she or he knows to be adverse to interests of certain members of the public. In order for the conduct to fall within the scope of Grenon v. Canada Revenue Agency C. Dario J. 173

the tort, the officer must deliberately engage in conduct that he or she knows to be inconsistent with the obliga- tions of the office. The essential principle underlying this tort is that public bodies must not use their powers for purposes incompatible with the purpose en- visaged by the statutes under which they derive their powers. The purpose of this tort is to provide a remedy where a public official or body misuses powers with which he or she has been endowed. 93 In R. v. Ereiser, 2013 FCA 20, [2013] 3 C.T.C. 49 (F.C.A.), the tax- payer appealed certain reassessments to the Tax Court of Canada on the grounds, inter alia, that the reassessments were issued as a result of mis- feasance in public office on the part of CRA investigators. The alleged misfeasance was the authorization of a grossly inflated reassessment to coerce a guilty plea to a criminal charge. The Tax Court struck this pro- vision of the notice of appeal on the grounds that, as a statutory court, it was without jurisdiction to vacate the reassessment on that basis. The Federal Court of Appeal agreed, holding that the taxpayer must seek re- lief from the alleged misfeasance elsewhere. In arriving at this conclu- sion, the Court of Appeal at para 19 allowed for the possibility that the conduct alleged could constitute misfeasance in public office: The second proposition is that it is misfeasance in public office for a tax official to authorize an income tax assessment in an inflated amount as a means of coercing an admission of criminal liability. This proposition is unchallenged by the Crown. For the purpose of this appeal I will assume without deciding it is correct. 94 At para 21, the Court of Appeal drew a distinction between validity and correctness of tax assessments, holding that an assessment is “valid” if it is made in compliance with the procedural provisions of the ITA and is “correct” if the amount of tax assessed is based on the applicable pro- visions of the ITA. The Court of Appeal then held at para 31 that the conduct of tax officials is not relevant to the Tax Court’s determination of the validity and correctness of a tax assessment. 95 The invalidity or incorrectness of the tax assessment may be a factor to consider, however, in establishing misfeasance. In Gardner v. Canada (Attorney General), 2013 ONCA 423, 116 O.R. (3d) 304 (Ont. C.A.), the plaintiff brought a claim for misfeasance after successfully appealing an assessment. The defendant argued that the plaintiff’s claim was statute- barred. The Court of Appeal referred to the reasoning in Odhavji and held at paras 24 and 27 that appealing the assessment was a necessary first step to the plaintiff’s claim. The Court of Appeal held at para 24 that 174 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

a Category B claim could not be proven without showing that the CRA’s conduct was unlawful, which required a finding that the assessment was invalid. The Court also held at para 27 that a Category A claim “would not have much merit without a successful tax appeal”. Accordingly, the plaintiff was obliged to pursue the tax appeal process before she could bring her claim. 96 It is important to recall, however, that invalidity of an assessment does not equate to misfeasance on the part of the tax officials involved. In Foote v. Canada (Attorney General), 2015 BCSC 849, [2015] 5 C.T.C. 150 (B.C. S.C.), the Court held as follows at paras 110 and 113: The same point was made by the Nova Scotia Supreme Court in [Canus]. That case arose out of a tax audit that led to a reassessment that was ultimately vacated following an internal appeal. The auditor was alleged to have deliberately and wilfully ignored information available to him, using previously discredited information instead. There was evidence that employees in CRA’s appeals division con- sidered the audit to be seriously flawed. Nevertheless, the Court found there was no misfeasance because the plaintiff failed to estab- lish that the auditor acted with malice or intended to cause harm to the plaintiff. As the Court stated at para. 43, “being wrong is not sufficient to commit the tort of public misfeasance.” ... In [Leroux], ... the court held that the CRA auditors were not negli- gent, let alone liable for misfeasance, for characterizing the plain- tiff’s income in a manner that turned out to be wrong. This is so, even though the auditor “made erroneous and unsupported assump- tions in her approach” (para. 327). 97 I find that a determination that the Reassessments are invalid is a nec- essary, though not sufficient, precondition for a finding of misfeasance in public office. Irrespective of whether the claim falls within Category A or Category B, it would be difficult to prove without a determination of invalidity of the Reassessments. This is particularly so given that para- graph 61 of the Statement of Claim indicates that the alleged unlawful conduct is the issuance of the Reassessments, which can be unlawful only if they are invalid to the knowledge of the CRA Personnel. As was the case in Gardner, the unlawful conduct can be established only if there is a finding of invalidity by the Tax Court. 98 Therefore, it cannot be said at this point that the allegations of misfea- sance in public office set forth in paragraphs 60, 61 and 62 of the State- ment of Claim have no reasonable prospect of success. They are, how- Grenon v. Canada Revenue Agency C. Dario J. 175

ever, premature and that portion of this action is stayed pursuant to Rule 3.68(1)(d).

4. Abuse of Process 99 The CRA also argues that Grenon’s allegations in the Statement of Claim of the tort of abuse of process disclose no cause of action. The essence of this tort is aptly set out in the opening passage of a paper by Mr. Justice Paul Perrell of the Ontario Superior Court of Justice, “Tort Claims for Abuse of Process”, (2007) 33 Advoc Q 193: So long as it is not the predominant purpose, it may be quite proper for a litigant to bring a lawsuit for spite and for the purpose of mak- ing his or her opponent silent, miserable, weak or incapable. How- ever, there is a tort, known as the tort of abuse of process, that ex- poses a litigant to liability for damages if he or she abuses the process of the law by using it to extort property or to achieve a collat- eral purpose outside the ambit of his or her lawsuit. 100 This tort has been analyzed in a number of cases, most of them ema- nating from Alberta and Ontario. That case law makes clear that the tort is to be narrowly construed and requires proof of certain specific ele- ments. It is not sufficient that a party has acted out of spite or with bad intentions. Rather, the “bad actor” must be seeking to effect an objective beyond what can be achieved through the legal process and must act in a manner to achieve that purpose. 101 In Rocky Mountain Rail Society v. H & D Hobby Distributing Ltd. (1995), 167 A.R. 16 (Alta. Q.B.), an oft-quoted case from this Court, Fruman J (as she then was) said at paras 19 - 20: Based on my analysis of the case law, two elements must be pleaded: first, there must be an improper purpose which is outside the ambit of the litigation; secondly, there must be a definite act or threat in fur- therance of that purpose. If one or both of these elements is absent, it is then beyond doubt that the counterclaim is doomed to failure. Any lawsuit may have the effect of causing serious economic loss to the opposing party. It may have an effect on the party’s customers, shareholders, creditors, lenders, and on members of the community in which it conducts its business. Further consequential losses may result from this economic loss. If financial loss were the only require- ment to constitute abuse of process, theoretically every plaintiff would be open to such a claim. Any lawsuit may have the effect of “antagonizing, impoverishing or intimidating” the opposing party. (Poulos v. Matovic (1989), 47 C.C.L.T. 207 (H.C.J.), at 209). The 176 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

lawsuit may have the effect of bringing about a settlement. That also is not beyond the ambit of the litigation. ([Tsiopoulos v Commercial Union Assurance Co of Canada (1986), 57 OR (2d) 117 (HCJ)] at 122.) In order to found a claim for abuse of process, the improper purpose must be outside the ambit of the litigation. 102 In Ilic v. Calgary Sun (1998), 224 A.R. 116 (Alta. Q.B.), this Court held at para 35 that even a malicious motive for the litigation was insuffi- cient to make out the tort if the required elements are not present. The Court stated that “A desire for revenge may be present collaterally in many types of litigation but that fact alone does not render the litigation abusive or preclude it from proceeding.” 103 In M. (A.) v. Matthews, 2003 ABQB 942, 344 A.R. 182 (Alta. Q.B.) at para 18, Justice Veit cited the Tsiopoulos decision for the elements of the tort: The essential elements of abuse of process are: first, a collateral and improper purpose, such as extortion, and secondly, a definite act or threat, in furtherance of a purpose not legitimate in the use of the process. Some such overt conduct is essential, because there is clearly no liability when the defendant merely employs regular legal process to its proper conclusion, albeit with bad intentions. 104 Justice Veit went on at para 28 to say that an action for the tort of abuse of process will not lie where a party has instituted proceedings in order to effect an object within the scope of the proceedings, even if the proceedings have been irregularly or maliciously instituted. 105 In WestJet Airlines Ltd. v. Air Canada, [2005] O.J. No. 2310 (Ont. S.C.J.), the plaintiff asserted that the defendant had brought a separate proceeding against it in order to “destroy” it and eliminate a competitor. The Court held at para 19 that “... if there is some basis for the claim, it seems to me that it then becomes difficult to characterize the action as having been instituted for an improper purpose just because a by-product of it successful prosecution may be the elimination of the defendant as a competitor.” The Court also held that “... there is no liability when the defendant properly employs the legal process but with bad intentions.” 106 The Court went on at para 23 to identify two arguments in favour of the narrow scope of the tort. The first is that allowing such claims to be advanced easily might lead to a proliferation of litigation with every ac- tion being met by an abuse of process action in response. The corollary concern is the possible chilling effect if parties wishing to seek resolution Grenon v. Canada Revenue Agency C. Dario J. 177

of disputes in the courts must fear being subject to abuse of process claims with the attendant costs and prospect of damages awards. 107 In Rowe v. Unum Life Insurance Co. of America (2006), 37 C.C.L.I. (4th) 32 (Ont. S.C.J.) at para 255, the Court reiterated the narrow scope of the tort and the requirement that both the improper purpose and the act or threat in furtherance thereof must be outside the ambit of the claim. The Court noted that the alleged abuse must relate to something other than the prosecution and conclusion of the action itself and stated at para 257 that settlement is not an improper purpose: Based on the above reviewed jurisprudence it is my view that the proposed pleading with respect to the tort of abuse of process is not tenable at law. Alleging a claim or defence for the sole purpose of inducing settlement, or prosecuting a matter in a manner intended to dissuade a plaintiff from pursuing his claim does not suffice to meet the two essential elements for the tort of abuse of process. An im- proper purpose, collateral to the litigation is required. Such has not been pleaded. The issue of whether the defendant acted properly or reasonably in the conduct of the litigation, is an issue with respect to costs. 108 Similar comments were made in Apotex Inc. v. Sanofi-Aventis Canada Inc., 2010 FC 182, 364 F.T.R. 131 (Eng.) (F.C.). In that case, Apotex sued Sanofi, seeking a declaration that a product it intended to manufacture and sell in Canada would not infringe Sanofi’s patent. Sa- nofi’s response was to sue for patent infringement and Apotex argued that the predominant purpose of Sanofi’s lawsuit was to discourage Apotex’s action. The Court held at para 73 that there could be no abuse where an action was taken to assert the very right sought to be impugned by the opposing party. 109 The elements of the tort of abuse of process were set out in more detail by Justice Perell in Harris v. GlaxoSmithKline Inc., 2010 ONSC 2326, 101 O.R. (3d) 665 (Ont. S.C.J.) as follows at para 48: The case law authorities establish that there are four constituent ele- ments to the tort of abuse of process: (1) the plaintiff is a party to a legal process initiated by the defendant; (2) the legal process was ini- tiated for the predominant purpose of furthering some indirect, collat- eral and improper purpose; (3) the defendant took or made a definite act or threat in furtherance of the improper purpose; and (4) some measure of special damage has resulted. 110 These factors were adopted by the Alberta Court of Appeal in 3058354 Nova Scotia Co. v. On*Site Equipment Ltd., 2011 ABCA 168 178 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

(Alta. C.A.), the case cited by Grenon in support of his argument, though the Court of Appeal went on at para 59 to state that it was not necessary to decide if the tort of abuse of process was made out in that case. 111 In respect of the first element, Grenon asserts in his brief that he was “subjected to legal process commenced by the Defendants, including the Reassessments and the Jeopardy Orders”. As is clear from the facts set out above, legal proceedings in respect of this matter have been com- menced in three courts. Both the action in this Court and the appeal of the Reassessments to the Tax Court of Canada were initiated by Grenon, however, and cannot form the basis of the tort of abuse of process as against the CRA. The application to the Federal Court for the Jeopardy Orders was brought by the CRA and satisfies the first element of the test. Grenon also asserts that the Reassessments themselves constitute a legal process for purposes of this analysis. 112 Although Grenon cites no case in support of the proposition that the Reassessments themselves constitute a legal process, there is some sug- gestion in the case law that quasi-judicial processes may be considered in respect of the tort of abuse of process. In Big Bear Hills Inc. v. Bennett Jones Alberta Ltd. Liability Partnership, 2010 ABQB 764, 507 A.R. 21 (Alta. Q.B.), Justice Marceau, in arriving at his decision, considered pro- ceedings before the Development Appeal Board of the Municipal District of Rocky View No. 44 (“DAB”) and the Alberta Environmental Appeal Board (“AEAB”). He stated as follows at para 71: I have found there is no evidence the Defendant law firm was pursu- ing the action for the predominant purpose of hurting the Plaintiffs. The evidence of Chomistek does not lead to the inference the legal process was used “to gain an end which the legal process does not entitle the plaintiff to obtain”. The injunction and the damages being claimed are within the ambit of the litigation in the action by GVR against BBH and Chomistek. The actions of the law firm before the DAB and AEAB are all seeking relief or direction within the ambit of those actions. I found no evidence of the tort of abuse of process before the Courts or before the quasi-judicial tribunals. 113 Even assuming, without deciding, that the Reassessments can be con- sidered a “legal process” for purposes of this analysis, I am satisfied that Grenon’s claim for the tort of abuse of process has no reasonable pros- pect of success. Neither an improper purpose nor a definite act or threat in furtherance of such purpose is established by Grenon’s pleading. 114 In respect of improper purpose, Grenon asserts at paragraph 72 of the Statement of Claim that the CRA wilfully misused court processes with Grenon v. Canada Revenue Agency C. Dario J. 179

no legitimate belief in the positions being advanced and for the purposes of pressuring Grenon into paying tax amounts the CRA knew had no legitimate basis and of fulfilling the “CRA Shakedown Strategy”, which Grenon defines in the Statement of Claim as follows: 59(c) By an overarching strategy, planned, set and directed by and from the highest levels within the CRA: (i) To pursue, in a fervent and capricious manner, Mr. Grenon and other taxpayers involved with substantial investments in MFTs in their RRSPs; (ii) To act under the guise of assessing legitimate taxes and of proceeding with related legitimate court processes, but with- out any reasonable belief in a legal basis for the actions or positions taken; and (iii) To harm Mr. Grenon’s legitimate interests and to use the power of the state to take unlawful steps to, among other things, deprive him of his legal rights, and with a view to at- tempting to pressure Mr. Grenon into negotiating a settlement on unreasonable terms. 115 I will address the florid language employed in this and other portions of the Statement of Claim later in these Reasons. 116 In any event, even if I ascribe to the CRA the “Improper Motives” to which Grenon refers, the first element of the tort is not met. The case law makes it abundantly clear that a party’s motives, however malicious, are not relevant in the absence of a collateral purpose entirely outside the ambit of the legal process. The substance of Grenon’s alleged improper purpose is that the CRA intended to force Grenon to pay an amount of tax beyond what was legitimately owing. Indeed, his brief describes the alleged improper purpose in this manner: The second element (of indirect, collateral and improper predominant purpose) is met through the Defendants’ motive to pressure Mr. Gre- non into a settlement on unreasonable terms as opposed to objec- tively and reasonably applying the ITA and GAAR. 117 This argument cannot succeed. As the Court stated in Rowe, asserting a claim for the purpose of inducing settlement cannot constitute a collat- eral purpose as it is not outside the ambit of the litigation. Moreover, the collection of tax is the sine qua non of the process undertaken by the CRA. The audit, the Reassessments, the defence of the appeal to the Tax Court and the application to the Federal Court for the Jeopardy Orders all are related to that purpose. Even if the CRA’s position is, in Justice Fruman’s words in Rocky Mountain Rail, “factually groundless”, the pur- 180 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

pose of collecting tax cannot be said to be “entirely outside the ambit” of this legal process. 118 In addition, nothing in Grenon’s Statement of Claim establishes a def- inite act or threat in furtherance of an improper purpose. Again, it is clear from the case law that this act or threat must be separate from the legal process in question because, as this Court stated in AM, “there is clearly no liability when the defendant merely employs regular legal process to its proper conclusion, albeit with bad intentions”. 119 Grenon alleges several “acts or threats” most of which are clearly part of the legal process in this matter. These include issuing the Reassess- ments with no bona fide belief in their bases or amounts, obtaining the Jeopardy Orders without proper basis, failing to disclose material facts in obtaining the Jeopardy Orders, issuing improper document disclosure de- mands and demanding cross-examination of Grenon. None of these acts is entirely outside the ambit of the legal process in question. As noted by the Court in Rowe, “The issue of whether the defendant acted properly or reasonably in the conduct of the litigation is an issue with respect to costs.” These allegations are insufficient to ground a claim for the tort of abuse of process. 120 In his brief, Grenon also asserts a sufficient act or threat in the CRA’s “having the communications with CIBC and RGMP and sending the Sec- ond Proposal Letter to CIBC”. This argument fails. First, as discussed above, I find that there can be no reasonable objection to communication with CIBC and RGMP in their capacities as trustees, given their obliga- tion to comply with the law and the potential for liability on their part under the ITA. Second, this action was also related to the CRA’s purpose of assessing and collecting tax and is therefore not an act in furtherance of a purpose outside the ambit of the legal process. 121 Accordingly, Grenon’s claim for the tort of abuse of process has no reasonable prospect of success. The following paragraphs of the State- ment of Claim are struck for that reason. 122 Paragraphs 27, 28, 29 and 31 all pertain to the conduct of the audit and the issuance of the First Proposal Letter, which are part of the CRA’s “regular legal process”. 123 Paragraph 57 alleges a “malicious and abusive misuse and perversion of the court process”. Had I not already struck this paragraph on the basis of the Federal Court’s jurisdiction, I would do so here on this basis. Grenon v. Canada Revenue Agency C. Dario J. 181

124 Paragraph 59 sets out the CRA’s alleged motive and the “CRA Shakedown Strategy”, including the intent to pressure Grenon into settle- ment. As discussed above, this cannot constitute the tort of abuse of pro- cess and this paragraph is struck. 125 Paragraphs 72 and 73 set out the specific allegations of the tort of abuse of process. The factual allegations set out in these paragraphs can- not support this claim and they are struck.

5. Wrong Entity 126 The CRA asserts that Grenon is the wrong party to bring this lawsuit. While the CRA is not specific, I find that this issue is properly dealt with under Rule 3.68(2)(b) because there can be no reasonable claim if the suit is brought by the wrong party. The CRA argues that Grenon’s claim relates to alleged wrongs committed against himself, the RRSP trusts and other “entities with which [Grenon] has been involved”. The CRA’s po- sition is that it is plain and obvious that the claim must fail based on the Rule in Foss v. Harbottle (1843), 67 E.R. 189 (Eng. V.-C.). That Rule is succinctly stated in Temple v. Minister of National Revenue, 2001 FCT 1254, [2002] 2 F.C. 458 (Fed. T.D.) at para 20: The Rule in Foss v. Harbottle, supra, is that individual shareholders do not have a cause of action for wrongs done to the company: if an action is to be brought in respect of such a loss, it must be brought either by the corporation itself, or by way of a derivative action by shareholders, with the wrongdoer and the company as defendants. 127 The CRA argues that, under Foss v. Harbottle, the “gravamen of the cause of action alleged” must result from wrongs done to the plaintiff himself, not to a corporation of which he is a shareholder. The CRA as- serts that, by extension, any claims relating to the RRSP trusts rather than to Grenon personally must be struck. 128 Grenon points out that there is a fundamental difference at law be- tween corporations and trusts in that a corporation has a legal identity separate from that of its shareholders. Grenon’s position is that he has suffered damages personally as a result of the CRA’s actions and must therefore be the proper plaintiff in this action. 129 Though it is often expressed as a Rule pertaining to corporations, it is clear that the Rule in Foss v Harbottle is applicable in other contexts as well. The British Columbia Court of Appeal noted in Everest Canadian Properties Ltd. v. Mallmann, 2008 BCCA 276, 82 B.C.L.R. (4th) 230 (B.C. C.A.) that it has been applied to trade unions and partnerships. In 182 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Mikisew Cree First Nation v. Canada (Attorney General), 2016 ABQB 191 (Alta. Q.B.), Chief Justice Wittmann of this Court applied the Rule in the context of an aboriginal claim. As the Court in Everest held at para 20, “Foss v Harbottle has been held to apply, then, to associations that are not legal persons at law and in which the members hold beneficial interests in the assets, or net assets, of the association.” 130 The proper application of the Rule in Foss v Harbottle depends upon a clear understanding of its content and purpose. The Court in Mayer v. Osborne Contracting Ltd., 2012 BCCA 77, 29 B.C.L.R. (5th) 232 (B.C. C.A.) aptly summarized these at para 106: The Rule in Foss v. Harbottle is the subject of a comprehensive dis- cussion in [Everest]. From Everest, I take the following propositions. The Rule holds that the proper plaintiff in respect of a wrong done to a company or association of persons is prima facie the company or the association of persons itself, and no individual member can main- tain such an action if the matter relied upon as constituting the cause of action can be approved by a majority of members. Implicitly, the Rule applies if the cause of action properly belongs to the company or the association of persons and not to an individual member is his own right (para. 7). The Rule does not apply to a cause of action that belongs to an individual member of the company or the association personally, an exception that is “particularly difficult to delineate in particular fact situations” (para. 9). Thus, a member who suffers per- sonal and direct damage may bring a claim in that respect, but an individual member cannot claim for losses that are “reflective” or “derivative” of losses suffered by the company, such as a diminution in share value as a result of damage done to the company (para. 28). The reasons for the Rule include the avoidance of a multiplicity of actions and the avoidance of double recovery for the same loss (pa- ras. 22, 28). The cases make clear that there is an exception to the Rule in Foss v Harbottle that permits an individual member of an association to sue in his or her own right provided two criteria are met: the individual must have an independent relationship with the alleged wrongdoer and must have an independent loss separate from that suffered by the corpo- ration or association. See Robak Industries Ltd v Gard- ner, 2007 BCCA 61, 65 BCLR (4th) 62 at para 38. Grenon v. Canada Revenue Agency C. Dario J. 183

131 The application of the Rule in Foss v. Harbottle to the beneficiary of a trust presents an additional issue. This was discussed in Mayer v. Os- borne as follows at paras 127, 129 and 241: The nature of the remedies available to beneficiaries of a trust are discussed in Waters’ Law of Trusts in Canada, 3d ed. (Toronto: Thompson Canada Limited, 2005) at 1202-06. At 1203, Professor Waters states that the “classic view” is that “the remedies of the ben- eficiary are personal; they lie against the trustee to compel him prop- erly to discharge his duties as a trustee” and, at 1204, The beneficiary’s principal right is to require that the trustees, who have caused loss to the trust through their breach of trust shall out of their own pockets indemnify the trust for its loss ... And it is up to the trustees to re- cover, if they can, from any third party who was involved with them in the breach. ... As stated in Nelson House Indian Band v. Young (1999), 169 D.L.R. (4th) 606, [1999] 6 W.W.R. 405 (Man. C.A.), [13] Beneficiaries of a trust have no status to commence an action for the protection or recovery of trust property if the trustee is willing and able to commence such an action.... A beneficiary’s first avenue of redress to recover trust property wrongly taken by a stranger to the trust lies, however, against the trustees to compel them to carry out their duties. It is only if the trust- ees are unwilling or unable to take action that a beneficiary may as- sume the position of the incapacitated trustees and sue to recover the trust property... 132 This Court also has held that beneficiaries have no authority to sue third parties for wrongs done to a trust; rather, it is the trustee who should bring the action. See Stoney Tribal Council v. Imperial Oil Resources Ltd., 2012 ABQB 557 (Alta. Q.B.), aff’d 2014 ABQB 408 (Alta. Q.B.). 133 As indicated above, the Reassessments were issued against the CIBC RRSP and against Grenon personally. In respect of the Reassessment of Grenon personally, it is clear that the Rule in Foss v. Harbottle can have no application as his claims stemming from that Reassessment are per- sonal to him and independent of any loss to the CIBC RRSP rather than derivative. 134 With respect to Grenon’s claims stemming from the Reassessment of the CIBC RRSP, two issues arise. First, there is nothing in the Statement 184 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

of Claim to indicate that CIBC, as trustee of the CIBC RRSP, is “unwill- ing or unable” to take action. Therefore, under Professor Waters’ “classic view”, Grenon has no status to bring this action on behalf of the CIBC RRSP. 135 It is true that the law in respect of a beneficiary’s authority to sue for wrongs relating to a trust is by no means settled. The subject of benefici- ary control of a trust has been the subject of vigorous debate for some years. Nevertheless, at no point in the Statement of Claim does Grenon assert that he has the authority to control the RRSP trusts or to sue on their behalf. It may well be that, under the terms of the relevant trust agreements, Grenon does in fact have such authority. Such facts, how- ever, are not pleaded in the Statement of Claim. In the absence of such pleading, the case law indicates that Grenon is not the appropriate plain- tiff to pursue claims relating to the RRSP trusts and that such claims have no reasonable prospect of success pursuant to Rule 3.68(2)(b). 136 Further, I find that Grenon’s claims stemming from the Reassessment of the CIBC RRSP are barred by the Rule in Foss v. Harbottle. While Grenon may have an “independent relationship” with the CRA, his State- ment of Claim does not include allegations of fact sufficient to establish an “independent loss” separate from the CIBC RRSP. The losses alleged in his Statement of Claim are “reflective” of the alleged losses to the CIBC RRSP resulting from the Reassessments. For this reason also, I find that these claims have no reasonable prospect of success.

6. Management Defendants 137 The CRA asserts that the Management Defendants, which it defines to include Shelton, Lawrence, Carroll, Ross, Little, Baril, John Doe and Jane Doe, should be removed as Defendants on the grounds that the Statement of Claim does not disclose a cause of action against them. The CRA does not dispute that the Crown can be liable for damages arising from torts committed by Crown servants, but argues that a Crown servant cannot be held vicariously liable for the acts of his or her subordinates. The CRA’s position is that the Statement of Claim includes no allega- tions of fact that would support the claims against the Management Defendants. 138 As a result of the foregoing, all of Grenon’s claims are struck, with the exception of misfeasance in public office, which is stayed pending judgment on the validity of the Reassessments by the Tax Court. Grenon v. Canada Revenue Agency C. Dario J. 185

139 In respect of that claim, the CRA argues that there is no allegation of any action taken by the Management Defendants that would constitute deliberate unlawful conduct. 140 Grenon’s position is that the Statement of Claim makes allegations of fact against the CRA Personnel, the definition of which includes the Management Defendants. He argues that since allegations in pleadings must be assumed to be true for purposes of a striking application, the Management Defendants cannot assert that they were not involved. He also asserts that the Statement of Claim includes specific allegations of fact against the Management Defendants. 141 The allegations in the Statement of Claim under the heading “Misfea- sance in Public Office” are made against the CRA Personnel. Those alle- gations are somewhat factually vague, but effectively, the assertion is that the CRA Personnel issued the Reassessments with no reasonable be- lief in their validity. The allegations are not specific to any particular individual. 142 Grenon cites F. (A.) v. Alberta, 2014 ABQB 216, 587 A.R. 165 (Alta. Q.B.), in which Graesser J. stated at para. 39 that the plaintiffs’ pleadings for misfeasance in public office failed because they did not comply with “the requirement to specify exactly who the offending Crown agent or authority was, and what he or she did or failed to do.” At first blush, this would not seem to be of assistance to Grenon, given that he also does not specify what individual is responsible for what act. Instead, Grenon seems to assert that all of the individuals comprised within the CRA Per- sonnel were part of the alleged misfeasance. Given, however, that Gre- non defines the term “CRA Personnel” to include specific named indi- viduals, I find that this requirement is satisfied for the limited purposes of defeating the present application to strike these pleadings. 143 Accordingly, I find that it is not plain and obvious that the claims for misfeasance in public office against the Management Defendants have no reasonable prospect of success and I decline to strike them as defendants.

C. Improper Language 144 In the course of these Reasons, I have expressed concern about some of the language employed in the Statement of Claim. Rule 13.6(1) directs that a pleading must be “succinct” and, in my view, certain portions of the Statement of Claim and expressions used therein represent inappro- priate drafting that must be discouraged. 186 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

145 I note that Graesser J of this Court stated at para 61 of L. (P.) v. Al- berta, 2012 ABQB 309, 529 A.R. 21 (Alta. Q.B.) that “The allegations of malice and recklessness fit within the characterization of ‘frivolous, irrelevant or improper” in Rule 3.68(2)(c). They add nothing but unnec- essary colour to the allegations and should be struck.” He made a similar comment in para 59 of that case. 146 Where an allegation of malice is relevant to the cause of action, as with misfeasance in public office, it should remain, provided the facts plead are sufficient to support that cause of action. But where an allega- tion of that type serves only to add “unnecessary colour”, I agree with Justice Graesser that it has no place in the pleading. 147 Similarly, pleadings that amount to little more than puffery or mud- slinging ought also to be struck pursuant to Rule 3.68(2)(c). A highly colourful example of this is to be found in Jacobson v. Skurka, 2015 ONSC 1699 (Ont. S.C.J.), in which Justice Perell described the pleadings variously as “provocative” (para 12), “emotive grandstanding polemic” (para 27), and “replete with congratulatory, self-serving conclusions” (para 57). Justice Perell noted at para 41 that both sides were guilty of flouting the Rule that pleadings should be concise statements of material facts and he stated as follows at paras 64 and 85: However provoked a party may be, it is marginally relevant and not pleading a material fact to insult one’s opponent and his or her plead- ings with conclusory character assassination, which may have to wait a cross-examination at trial. That pleadings are absolutely privileged from being defamatory is not a license for maligning one’s opponent and even in defending himself or herself from allegations of negli- gence and breach of fiduciary duty a lawyer should exercise some restraint to not go farther than necessary to defend himself or herself. ... Here, it should be noted that it is Mr. Jacobson who infuses to the point of bloat his professional negligence claim against Mr. Skurka with the issues of Mr. Jacobson’s innocence from any criminal activ- ity and the sanctity and the importance to him of his reputation as a successful businessman and philanthropist. 148 Consistent with the above stated principles, I find that Grenon’s Statement of Claim includes several examples of statements and lan- guage that properly are characterized as irrelevant or improper. Many of these already have been excised on the grounds reviewed above. Had they not been, I would have struck them at this point. Grenon v. Canada Revenue Agency C. Dario J. 187

149 The words “Extensive” and “Improper” should be struck from the term “Extensive Improper Auditing Activities” leaving “Auditing Activities”. 150 The word “Improper” should be struck from the term “Improper Col- lection Activities” leaving “Collection Activities”. 151 The term “CRA Shakedown Strategy” is improper and should be struck in favour of the term “CRA Objective”. 152 Any such references remaining in the Statement of Claim will be struck. 153 The term “Improper Motives” will not be struck because it appears in the claim for misfeasance in public office, in respect of which the propri- ety of a public official’s motives is relevant.

V. Conclusion 154 In summary, the circumstances warrant striking parts of Grenon’s Statement of Claim pursuant to Rule 3.68(1)(a). a. Grenon’s claim that the Reassessments were “improper, unlawful and invalid” is outside the jurisdiction of this Court and meets the condition in Rule 3.68(2)(a). b. Similarly, Grenon’s claims pertaining to abuses of the process of the Federal Court are outside the jurisdiction of this Court and meet the condition in Rule 3.68(2)(a). c. Grenon’s claims of inducing breach of contractual relations and fiduciary duty have no reasonable prospect of success as contem- plated by Rule 3.68(2)(b). d. The CRA has no duty of care to an individual taxpayer. Accord- ingly, Grenon’s claim of negligence has no reasonable prospect of success as contemplated by Rule 3.68(2)(b). e. Grenon’s claim for the tort of abuse of process has no reasonable prospect of success as contemplated by Rule 3.68(2)(b). f. Grenon’s claims stemming from the Reassessment of the CIBC RRSP are brought by the wrong party and therefore have no rea- sonable prospect of success as contemplated by Rule 3.68(2)(b). 155 In the result, the following paragraphs of the Statement of Claim are struck: 27, 28, 29, 31, 41, 43, 44, 45, 49, 54, 56, 57, 58, 59, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73(b), 73(d) and 73(e). 188 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

156 The improper words in the terms “Extensive Improper Auditing Ac- tivities”, “Improper Collection Activities” and “CRA Shakedown Strat- egy” are struck, to the extent not otherwise removed by virtue of the foregoing. 157 Grenon’s claim of misfeasance in public office cannot be determined without a ruling by the Tax Court of Canada as to the validity of the Reassessments. Therefore, those claims, as set out in paragraphs 60, 61 and 62 are stayed pursuant to Rule 3.68(1)(d). Given my findings regard- ing the proper plaintiff to this claim, however, Grenon’s claim of misfea- sance in public office is limited to matters relating to the Reassessment against him personally, and not stemming from the Reassessment of the CIBC RRSP. Consequently, only the Reassessment of Grenon personally need be determined by the Tax Court of Canada in order for the claim of misfeasance in public office to proceed.

VI. Costs 158 The CRA has been largely successful in this application. Neverthe- less, one of Grenon’s claims remains to be adjudicated following the Tax Court of Canada’s determination on the validity of the Reassessment against Grenon personally. The parties can apply to me for a determina- tion of costs within 45 days of this decision if they are unable to agree on that issue. Application granted in part. Decore v. Decore 189

[Indexed as: Decore v. Decore] Lyndon Decore and Matthew Decore, Plaintiffs and Karyn Decore, Nicole Decore, Maligne Lodge Ltd and Tonquin Inn Ltd, Defendants Karyn Decore, Nicole Decore, and Decore Holdings Inc, Plaintiffs by Counterclaim and Lyndon Decore and Matthew Decore, Defendants by Counterclaim Alberta Court of Queen’s Bench Docket: Edmonton 1303-16302 2016 ABQB 246 Peter B. Michalyshyn J. Heard: September 22-23, 2015 Judgment: April 29, 2016 Estates and trusts –––– Estates — Miscellaneous –––– Deceased left estate to two sons and two daughters — Estate included hotel assets — Surrogate pro- ceedings began between children soon after probate, which resulted in consent agreements — Later, sons began action against daughters and corporate defen- dant regarding hotel assets — Sons claimed that action was brought in debt and was separate from probate proceedings, while daughters claimed that matter was related to will and required final determination regarding assets of estate — Daughters claimed that sons received improper overpayments from holding company — Daughters brought counterclaim related to overpayment — Parties brought separate applications for summary judgment — Applications dis- missed — Agreements in probate proceedings did not take rights and obligations relating to hotel assets outside of will or remove assets from administration of estate — No evidence that any standalone contract had been created giving rise to cause of action outside of administration of estate, rather, documentation showed intent to resolve estate matter as whole. Judges and courts –––– Surrogate and Probate Courts — Miscellaneous –––– Deceased left estate to two sons and two daughters — Estate included hotel as- sets — Surrogate proceedings began between children soon after probate, which resulted in consent agreements — Later, sons began action against daughters and corporate defendant regarding hotel assets — Sons claimed that action was brought in debt and was separate from probate proceedings, while daughters claimed that matter was related to will and required final determination regard- ing assets of estate — Daughters claimed that sons received improper overpay- ments from holding company — Daughters brought counterclaim related to 190 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

overpayment — Parties brought separate applications for summary judgment — Applications dismissed — Agreements in probate proceedings did not take rights and obligations relating to hotel assets outside of will or remove assets from administration of estate — Holding company added as party — Sons re- ceived within limitation period knowledge of added claim and would not be prejudiced in maintaining defence on merits — Adding holding company was necessary and desirable — Case was one where exercising broad, supervisory jurisdiction under surrogate rules was in order. Civil practice and procedure –––– Summary judgment — General princi- ples –––– Deceased left estate to two sons and two daughters — Estate included hotel assets — Surrogate proceedings began between children soon after pro- bate, which resulted in consent agreements — Later, sons began action against daughters and corporate defendant regarding hotel assets — Sons claimed that action was brought in debt and was separate from probate proceedings, while daughters claimed that matter was related to will and required final determina- tion regarding assets of estate — Daughters claimed that sons received improper overpayments from holding company — Daughters brought counterclaim re- lated to overpayment — Parties brought separate applications for summary judg- ment — Applications dismissed — Agreements in probate proceedings did not take rights and obligations relating to hotel assets outside of will or remove as- sets from administration of estate — Not shown that parties agreed to specific cash to close amount that limited payments to sons — Counterclaim by daugh- ters likelihood of success was not very high. Cases considered by Peter B. Michalyshyn J.: Allard v. Shaw Communications Inc. (2010), 2010 ABCA 316, 2010 Carswell- Alta 2106, 75 B.L.R. (4th) 40, 493 A.R. 182, 502 W.A.C. 182 (Alta. C.A.) — referred to Bhasin v. Hrynew (2013), 2013 ABCA 98, 2013 CarswellAlta 822, 544 A.R. 28, 567 W.A.C. 28, 362 D.L.R. (4th) 18, 12 B.L.R. (5th) 175, 84 Alta. L.R. (5th) 68, [2013] 11 W.W.R. 459, [2013] A.J. No. 395 (Alta. C.A.) — considered Bhasin v. Hrynew (2014), 2014 SCC 71, 2014 CSC 71, 2014 CarswellAlta 2046, 2014 CarswellAlta 2047, [2014] 11 W.W.R. 641, 27 B.L.R. (5th) 1, 464 N.R. 254, 379 D.L.R. (4th) 385, 20 C.C.E.L. (4th) 1, [2014] S.C.J. No. 71, [2014] 3 S.C.R. 494, 584 A.R. 6, 623 W.A.C. 6, 4 Alta. L.R. (6th) 219 (S.C.C.) — referred to Bhatt v. Hoogstraat (1989), 38 C.P.C. (2d) 55, 102 A.R. 336, 1989 CarswellAlta 421, [1989] A.J. No. 927 (Alta. Master) — referred to Borgland v. Kleefeld (February 17, 1978), Doc. 11135, [1978] A.J. No. 101 (Alta. C.A.) — referred to Charles v. Young (2014), 2014 ABCA 200, 2014 CarswellAlta 957, 97 E.T.R. (3d) 1, 577 A.R. 54, 613 W.A.C. 54 (Alta. C.A.) — referred to Decore v. Decore 191

Creston Moly Corp. v. Sattva Capital Corp. (2014), 2014 SCC 53, 2014 CSC 53, 2014 CarswellBC 2267, 2014 CarswellBC 2268, 373 D.L.R. (4th) 393, 59 B.C.L.R. (5th) 1, [2014] S.C.J. No. 53, [2014] 9 W.W.R. 427, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, (sub nom. Sattva Capital Corp. v. Creston Moly Corp.) [2014] 2 S.C.R. 633 (S.C.C.) — followed Haljan v. Popke (2003), 2003 ABCA 305, 2003 CarswellAlta 1514, 348 A.R. 48, 321 W.A.C. 48, 35 Alta. L.R. (4th) 29, [2003] A.J. No. 1319 (Alta. C.A.) — referred to Hryniak v. Mauldin (2014), 2014 CarswellOnt 640, 2014 CarswellOnt 641, 37 R.P.R. (5th) 1, [2014] S.C.J. No. 7, 46 C.P.C. (7th) 217, 27 C.L.R. (4th) 1, (sub nom. Hryniak v. Mauldin) 366 D.L.R. (4th) 641, 2014 CSC 7, 453 N.R. 51, 12 C.C.E.L. (4th) 1, 314 O.A.C. 1, 95 E.T.R. (3d) 1, 21 B.L.R. (5th) 248, [2014] 1 S.C.R. 87, [2014] A.C.S. No. 7, 2014 SCC 7 (S.C.C.) — followed J.J. Catering Ltd. v. M.G.M. Developments Ltd. (1986), 45 Alta. L.R. (2d) 318, 71 A.R. 204, 1986 CarswellAlta 124, [1986] A.J. No. 538 (Alta. Master) — referred to Jahnke v. Wylie (1993), 13 Alta. L.R. (3d) 31, 107 D.L.R. (4th) 211, 144 A.R. 188, 19 Admin. L.R. (2d) 133, 1993 CarswellAlta 114, [1993] A.J. No. 722 (Alta. Q.B.) — referred to Jahnke v. Wylie (1994), 26 Alta. L.R. (3d) 46, 162 A.R. 131, 83 W.A.C. 131, 119 D.L.R. (4th) 385, 28 Admin. L.R. (2d) 145, 1994 CarswellAlta 285, [1994] A.J. No. 912, 1994 ABCA 350 (Alta. C.A.) — referred to Klychak v. Samchuk (2012), 2012 ABQB 85, 2012 CarswellAlta 118, 532 A.R. 259 (Alta. Q.B.) — referred to Lee v. Yoo (2015), 2015 ABQB 522, 2015 CarswellAlta 1516 (Alta. Q.B.) — considered Lil Dude Ranch Ltd. v. 1229122 Alberta Inc. (2014), 2014 ABQB 39, 2014 CarswellAlta 82, [2014] A.J. No. 66, 585 A.R. 72, 5 Alta. L.R. (6th) 154 (Alta. Q.B.) — considered Makarchuk v. Pollard (1957), 23 W.W.R. 617, 1957 CarswellAlta 77, [1957] A.J. No. 38 (Alta. C.A.) — considered Nafie v. Badawy (2015), 2015 ABCA 36, 2015 CarswellAlta 106, 381 D.L.R. (4th) 208, [2015] 4 W.W.R. 498, 56 R.F.L. (7th) 28, 599 A.R. 1, 643 W.A.C. 1, 11 Alta. L.R. (6th) 1, [2015] A.J. No. 85 (Alta. C.A.) — considered P. (R.) v. V. (R.) (2012), 2012 ABQB 353, 2012 CarswellAlta 920, 70 Alta. L.R. (5th) 173, 541 A.R. 207 (Alta. Q.B.) — followed Pyrrha Design Inc. v. Plum (2016), 2016 ABCA 12, 2016 CarswellAlta 165 (Alta. C.A.) — considered Quaintance Estate, Re (2006), 2006 ABCA 47, 2006 CarswellAlta 147, 21 E.T.R. (3d) 179, [2006] A.J. No. 111, 56 Alta. L.R. (4th) 6, 380 A.R. 160, 363 W.A.C. 160 (Alta. C.A.) — referred to 192 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

R. c. Caron (2011), 2011 SCC 5, 2011 CarswellAlta 81, 2011 CarswellAlta 82, [2011] S.C.J. No. 5, 14 Admin. L.R. (5th) 30, 97 C.P.C. (6th) 205, [2011] 4 W.W.R. 1, 37 Alta. L.R. (5th) 19, (sub nom. R. v. Caron) 411 N.R. 89, (sub nom. R. v. Caron) 264 C.C.C. (3d) 320, (sub nom. R. v. Caron) 329 D.L.R. (4th) 50, (sub nom. R. v. Caron) 499 A.R. 309, (sub nom. R. v. Caron) 514 W.A.C. 309, [2011] 1 S.C.R. 78 (S.C.C.) — referred to Saraceni v. Saraceni (2013), 2013 ABCA 354, 2013 CarswellAlta 1993, 91 E.T.R. (3d) 30, 561 A.R. 187, 594 W.A.C. 187 (Alta. C.A.) — referred to Saskatchewan v. Buskas (1972), [1973] 3 W.W.R. 4, 1972 CarswellAlta 134, [1972] A.J. No. 111 (Alta. T.D.) — referred to Serdahely Estate, Re (2003), 2003 ABCA 156, 2003 CarswellAlta 728, 327 A.R. 314, 296 W.A.C. 314, 1 E.T.R. (3d) 271, [2003] A.J. No. 613 (Alta. C.A.) — considered Serdahely Estate, Re (2003), 2003 ABCA 311, 2003 CarswellAlta 1532, 5 E.T.R. (3d) 153, 21 Alta. L.R. (4th) 278, 339 A.R. 310, 312 W.A.C. 310, [2003] A.J. No. 1331 (Alta. C.A.) — considered Stout Estate v. Golinowski Estate (2002), 2002 ABCA 49, 2002 CarswellAlta 277, [2002] 4 W.W.R. 588, 43 E.T.R. (2d) 117, 100 Alta. L.R. (3d) 5, 18 C.P.C. (5th) 146, 299 A.R. 13, 266 W.A.C. 13, [2002] A.J. No. 247 (Alta. C.A.) — considered Surrendi Estate v. Surrendi (2001), 2001 ABQB 1099, 2001 CarswellAlta 1619, 42 E.T.R. (2d) 311, [2001] A.J. No. 1643 (Alta. Q.B.) — referred to Vandal v. Cousineau (2015), 2015 ABCA 408, 2015 CarswellAlta 2343, 609 A.R. 380, 656 W.A.C. 380 (Alta. C.A.) — followed Wilson (Next friend of) v. Aspen View Regional School, Division No. 19 (2014), 2014 ABQB 741, 2014 CarswellAlta 2232, (sub nom. Wilson v. Aspen View Regional School Division No. 19) 603 A.R. 79 (Alta. Q.B.) — referred to Windsor v. Canadian Pacific Railway (2014), 2014 ABCA 108, 2014 Carswell- Alta 395, [2014] 5 W.W.R. 733, 94 Alta. L.R. (5th) 301, [2014] A.J. No. 256, 371 D.L.R. (4th) 339, 56 C.P.C. (7th) 107, (sub nom. Windsor v. Canadian Pacific Railway Ltd.) 572 A.R. 317, (sub nom. Windsor v. Canadian Pacific Railway Ltd.) 609 W.A.C. 317 (Alta. C.A.) — followed Y. (W.J.) v. B. (S.J.) (2011), 2011 ABCA 37, 2011 CarswellAlta 84 (Alta. C.A.) — referred to 3S Resources Inc. v. Improvisions Inc. (2014), 2014 ABQB 746, 2014 Carswell- Alta 2220, 47 C.L.R. (4th) 37 (Alta. Q.B.) — considered 376599 Alberta Inc. v. Tanshaw Products Inc. (2005), 2005 ABQB 300, 2005 CarswellAlta 768, 6 B.L.R. (4th) 214, 379 A.R. 1, [2005] A.J. No. 670 (Alta. Q.B.) — referred to 1036122 Alberta Ltd. v. Khurana (2012), 2012 ABCA 10, 2012 CarswellAlta 4, 93 B.L.R. (4th) 113, 57 Alta. L.R. (5th) 338, 17 C.P.C. (7th) 334, 11 C.L.R. (4th) 164, 519 A.R. 221, 539 W.A.C. 221, [2012] A.J. No. 7 (Alta. C.A.) — considered Decore v. Decore 193

Statutes considered: Court of Probate Act, 1857 (20 & 21 Vict.), c. 77 Generally — referred to District Courts Act, S.A. 1907, c. 4 Generally — referred to s. 23 — considered s. 34 — considered s. 41 — considered Estate Administration Act, S.A. 2014, c. E-12.5 s. 4 — considered Judicature Act, R.S.A. 2000, c. J-2 Generally — referred to s. 8 — considered s. 28.1(1)(a)(i) [en. 2009, c. 53, s. 1(4)] — considered s. 28.2(1) [en. 2009, c. 53, s. 1(4)] — considered Justice Statutes Amendment Act, R.S.A. 2000, c. 16 (Supp.) Generally — referred to Limitations Act, R.S.A. 2000, c. L-12 Generally — referred to s. 6(1) — considered s. 6(3) — considered s. 6(3)(a) — considered s. 6(3)(b) — considered s. 6(3)(c) — considered s. 6(5)(b) — considered Supreme Court Act, S.A. 1907, c. 3 Generally — referred to Supreme Court of Judicature Act, 1873 (36 & 37 Vict.), c. 66 Generally — referred to Rules considered: Alberta Rules of Court, Alta. Reg. 390/68 Generally — referred to Alberta Rules of Court, Alta. Reg. 124/2010 Generally — referred to Pt. 3, Div. 3, subdiv. 7 — referred to R. 1.2 — considered R. 3.56(1) — considered R. 13.6(3)(q) — considered Surrogate Rules, Alta. Reg. 130/95 Generally — referred to Pt. 2, Div. 1 — referred to R. 2 — considered 194 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

R. 2(1) — considered R. 2(2) — considered R. 2(4) — considered R. 4 — considered R. 55-70 — referred to R. 64(1) — considered R. 66 — considered

APPLICATIONS by plaintiffs and defendants for summary judgment in debt action.

Michael McCabe, Q.C., Cherisse N. Killick-Dzenick, for Plaintiffs Grant S. Dunlop, Q.C., for Defendants, Karyn Decore, Maligne Lodge Ltd, Ton- quin Inn Ltd and Decore Holdings Inc Louis M.H. Belzil, Q.C., Rackel Belzil, for Defendant, Nicole Decore

Peter B. Michalyshyn J.: I. Introduction 1 In the prescient final paragraph of her will the testatrix Maureen De- core stated: I know that it will be difficult for my children to work together to resolve the distribution of my estate. I have tried to provide formulas and procedures in my will to ease the administration of my estate, but I cannot think of everything. I encourage my children to treat each other in a respectful, reasonable, and courteous manner, to try to re- solve matters by discussion and to submit any serious disputes to me- diation... I cannot impose mediation on my children, because it only works if it is voluntary. 2 More than nine years after her passing, the beneficiaries of Maureen Decore’s estate remain sharply divided. Still now, after competing sum- mary judgment applications, they will be divided because these reasons unfortunately fail to resolve the beneficiaries’ differences completely.

II. Background 3 The parties are Lyndon and Matthew Decore (“the Sons”) and Karyn and Nicole Decore, together with two corporations (“the Daughters”). Other entities are in play, including Decore Holdings Inc. (“DHI”), but none are parties to the Statement of Claim issued November 15, 2013. 4 The within action follows lengthy surrogate proceedings. Probate was granted on July 26, 2007, soon after the deceased’s passing. No one has Decore v. Decore Peter B. Michalyshyn J. 195

disputed the validity or core meaning of the will dated February 8, 2007 and codicil dated March 5, 2007. Maureen Decore died on March 8, 2007, just a month after the will, and three days after the codicil. 5 The surrogate hostilities first arose in an application brought on be- half of the Sons filed December 30, 2008. It was to be heard February 25, 2009. The relief sought included the appointment of a case manage- ment justice to assist in what the Sons believed would be “numerous re- maining issues arising in the administration of the Estate”. 6 On March 10, 2009, Justice Clackson was appointed to case manage the surrogate proceedings. (He continued in that role actively through the end of 2010, then it appears more nominally until a point in time in 2014 when an application for further case management was made. Following an October 1, 2014 case conference, I became case management justice in both the still-unresolved surrogate proceedings (ES03 125382) and the more recently commenced civil action (1303 16302) which is the imme- diate subject of these summary judgment applications.) 7 On the eve of the first application, brought long ago in the surrogate proceedings and then scheduled for a 5-day hearing, the parties entered into an agreement, dated November 27, 2009 (“the Agreement”). 8 Another application, again brought on behalf of the Sons, was filed about a year later, on October 21, 2010. It was meant to be heard Decem- ber 13, 2010. Again, days before that scheduled court appearance the parties entered into a second agreement, on December 8, 2010 (“the Sup- plemental Agreement”). 9 Both agreements were confirmed in a Consent Order signed by Jus- tice Clackson, and dated December 13, 2010. 10 Two further agreements were reached (January 31, 2011 and March 5, 2012); they do not appear to be central to what is currently before the court. 11 It appears that the parties resorted to little other formal litigation from the time of the December 13, 2010 Consent Order to the commencement of the within action.

III. The current action 12 Whatever progress was made in the interim appears to have come to a halt with the current action. As noted, it is not styled as a surrogate pro- ceeding as such. On its face it is a debt action. The primary relief sought 196 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

is a money judgment, failing payment of which then sale or foreclosure of certain mortgaged lands. 13 The parties disagree on the characterization of the current action vis- a-vis` the long-standing surrogate proceedings. 14 Fundamentally, the Sons allege that the 2009 Agreement and 2010 Supplemental Agreement take any rights and obligations relating to equalization of certain hotel assets amongst the four beneficiaries out of the will. The Sons allege the agreements are stand-alone contracts and enforceable as such in their action, and in this summary judgment appli- cation. The Sons argue that the within action has nothing to do with the will or the estate. They say that issues around the final distribution of estate assets are irrelevant to their action. They are for another day. 15 The Daughters disagree. They say the Agreement and Supplemental Agreement do not stand-alone but rather stand along-side the will. What’s more, they say the agreements, on their face, were clearly in- tended to effect a distribution of the estate on an equal basis. They say the Consent Order of December 13, 2010, made in the surrogate proceed- ings, on its face reiterates that intention. 16 For reasons which follow, this issue of characterization is resolved in favour of the Daughters. 17 Further, however the Sons’ cause is characterized, again for reasons which follow they fall well short of proving a case for summary judgment. 18 As to the Daughters’ counterclaim for alleged overpayment of interest on certain amounts, at the end of the day I am unable to make the neces- sary findings of fact to justify summary judgment in their favour.

The characterization issue 19 As noted, I have resolved this issue in favour of the Daughters. 20 Like the will, the 2010 Consent Order mentioned above was some- what aspirational. It recognized, to that point in the proceedings at least, the parties’ apparent wish and concurrence to resolve all estate-related issues. So too the case management judge who, by virtue of the preamble of the Order, was: ...satisfied that the Settlement Agreements constitute an effective method of disposing of all of the various assets under the administra- tion of the Executors to the satisfaction of the Beneficiaries and with the concurrence of the co-Executors. Decore v. Decore Peter B. Michalyshyn J. 197

21 The same preamble refers to affidavits of Lyndon Decore, including an affidavit sworn December 9, 2010, which states at paragraph 3 that the parties “... have been working hard in months past to find a resolution to all of the outstanding issues in respect of this Estate”. And at para- graph 6, states that certain third-party financing “... requires the existence of an agreement resolving all issues between [the beneficiaries] as a pre- condition to providing funding”. 22 The December 13, 2010 Consent Order and the affidavit of Lyndon Decore sworn in support of it support a finding that the agreements be- tween the parties were tied inextricably to the administration of the estate and thus the surrogate proceedings. Neither supports an interpretation that the parties — including the co-executors — intended that a debt ac- tion based on court-ordered security or otherwise, was to be ‘carved out’ of the administration of the estate/surrogate proceedings. 23 Coming long before the Consent Order, the original agreement of No- vember 27, 2009, in its preamble, states that “WHEREAS the parties de- sire to resolve their differences by agreements supplementing the Will” [emphasis added]. And as stated at paragraph 13, the parties agreed that the distribution of the Estate under the will, “as supplemented and modi- fied” by the agreement, will on a best-efforts basis be wound up by a certain date (April 30, 2010). Lyndon Decore said the same thing when cross examined, on December 9, 2014 (at paragraph 28). 24 This ‘supplements and modifies’ language, and the numerous refer- ences in the agreements to the will, and of the parties’ intention to wrap up the estate distribution as a whole, stands in contrast to the absence of wording, or statements of intent, that anything in the agreements was in- tended to or had the effect of creating a standalone contract, in effect to carve out of Maureen Decore’s will the two largest assets of her estate, and to give rise to a cause of action outside of the administration of the estate under the court’s surrogate jurisdiction. 25 The Sons focus on paragraph 5(3) of the Agreement, but it cannot be read apart from paragraph 5(2): 5(2) The Daughters will acquire the Maligne and Tonquin companies and will raise the maximum traditional bank or credit union financing they can using the assets and cash flows from those operations as the security for the loans. The amounts so raised shall be paid to the Es- tate and dealt with and distributed promptly in accordance with the Will as amended by this Agreement; 198 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

5(3) To the extent that the amounts so raised are insufficient to pay the purchase price for all of the shares and the debt of Maligne Lodge Ltd. and Tonquin Inn Ltd., that balance shall be a debt of the Daugh- ters to the Sons to the extent of half of the shortfall, and all indebted- ness of the Daughters to the Sons shall be secured by way of mort- gage on the assets of Maligne Lodge Ltd. and Tonquin Inn Ltd.... 26 Nor can paragraphs 5(2) and 5(3) be read in isolation from the “hotchpot” provisions set out at articles 2.27-2.33 of the will, and re- ferred to elsewhere in the will from time to time. I do not agree with the Sons’ contention that the agreements were intended to or had the effect of ousting the hotchpot which was fundamental to the testatrix’s inten- tions. I agree with the Daughters that I must have regard to the hotchpot provisions and references when I consider the Sons’ position regarding the existence of a standalone contract. The hotchpot provisions were in- cluded in the will to enable the co-executors to effect an equitable distri- bution of all of the assets under Maureen Decore’s control or partial con- trol, whether or not all of those assets formed part of Maureen Decore’s own estate as such. The agreements between the beneficiaries (and, im- portantly, the co-executors) are all consistent with the hotchpot provi- sions, and with the testatrix’s core intention of passing on, as near as possible, an equal distribution of her estate. I agree that what is not con- sistent with any of this is a standalone contract that can be sued on outside the will and its administration. 27 Nor am I persuaded by the Sons’ argument that because in several respects the parties agreed to change the will’s “mechanics of distribu- tion” — the Sons’ phrase — accordingly “it is clear that the [various ‘settlement’ agreements] took the entirety of the process of distribution of Maligne and Tonquin out of the mechanics of the Will” (para 28 of the Sons’ Brief filed September 11, 2015). Nor am I persuaded that because the parties agreed to create a number of obligations not contemplated by the will, these various agreements comprise a new contractual obligation, a standalone contract, independent of the will. 28 The Sons acknowledge that the various settlement agreements deal with a great many topics. But only some of those are ‘standalone’ topics, in the Sons’ submission. The Sons identify not fewer than eight other topics arising from the settlement agreements that are not standalone, or independent from the will. 29 This mixing and matching of what is in or out of the will tends to undermine the Sons’ position that “plainly” the parties intended that cer- tain provisions were meant to stand independently of the will. Decore v. Decore Peter B. Michalyshyn J. 199

30 Mindful of the fact that the parties were represented by counsel throughout — the Sons, Daughters and the co-executors — had they in- tended fundamentally to alter the will as suggested by the Sons, they could and would have said so in a deliberate and transparent manner.

The Sons’ summary judgment application 31 If I am wrong with regard to the ‘characterization’ issue — or even if the Sons’ application can be re-styled as partial summary judgment or the trial of an issue — I will now deal with the merits of the application. 32 No one disagrees with the legal test for summary judgment. In Windsor v. Canadian Pacific Railway, 2014 ABCA 108 (Alta. C.A.) at para 13 the court endorses the following propositions laid out in Hryniak v. Mauldin, 2014 SCC 7 (S.C.C.) (CanLII), [2014] 1 S.C.R. 87 (S.C.C.): 49 There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. The modern test for summary judgment is therefore to examine the record to see if a disposition that is fair and just to both parties can be made on the existing record. 33 More recently, in Pyrrha Design Inc. v. Plum, 2016 ABCA 12 (Alta. C.A.) at para 19 the majority commented as follows: [19] This Court has recently made clear that summary disposition is available where a fair process reveals there is no merit to a claim: 776826 Alberta Ltd v Ostrowercha, 2015 ABCA 49 (CanLII) at para 13, 593 AR 391. “The question is whether there is in fact any issue of ‘merit’ that genuinely requires a trial, or conversely whether the claim or defence is so compelling that the likelihood it will succeed is very high such that it should be determined summarily”: WP v Al- berta, 2014 ABCA 404 (CanLII) at para 26. 34 As noted I have found that the evidence falls well short of proving any particular sums owing to the Sons, whether as a debt as defined by the Agreement, or in the context of achieving equalization of the estate as a whole. As such, the Sons’ application fails at the first stage of the test for summary judgment: the evidence does not allow me to make nec- essary findings of fact to support their cause. 35 Some further background is in order. More than half of Maureen De- core’s estate was comprised of two hotel properties in Jasper, Alberta. In 200 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

her will, Maureen Decore left Tonquin Inn Ltd. to the Daughters. By way of an option in the will, which the daughters exercised, they were also left Maligne Lodge Ltd. 36 No one disagrees that Maureen Decore intended her four children to share in her estate as nearly equally as possible. Given the value of the hotel properties, however, the Daughters needed to fund an equalization to the Sons to make them whole. This objective was largely the point of the Agreement and Supplemental Agreement. And while these agree- ments departed in some respects from the will, there was no overall de- parture from Maureen Decore’s core intention. 37 Again turning to paragraphs 5(2) and 5(3) of the Agreement, they provide that as a means to achieving equality the Daughters would raise the maximum financing available using the hotel assets and cash flows; if that financing fell short of the purchase price for all of the shares and debt of the companies operating the hotels, then one half of that shortfall would become a debt of the Daughters to the Sons. That debt would be secured by a mortgage on the assets of the companies operating the ho- tels on terms that included interest at eight per cent per annum. 38 The Sons allege that on application of paragraph 5(3) of the Agree- ment the debt of the Daughters was $9,161,467 “as of the date of the [November 27, 2009] Agreement”. This figure is one half of the follow- ing total, alleged at paragraph 6 of the Statement of Claim, and at para- graph 10 in the November 20, 2014 affidavit of Lyndon Decore filed in support of this summary judgment application: a. Value of Tonquin Inn Ltd. $13,736.896; b. Value of Maligne Lodge Ltd. $ 8,156,038 c. Bank of Nova Scotia debt ($ 3,570,000) TOTAL $18,322,934 39 None of these figures appear in any agreement between the parties. Indeed, the only evidence of them is paragraph 10 of Lyndon Decore’s affidavit, mentioned above. And this evidence is unattributed; nowhere in his sworn evidence does Lyndon Decore expressly source the values set out above. 40 Exhibit “E” to Lyndon Decore’s November 20, 2014 affidavit is a schedule prepared November 4, 2014. That schedule uses as a starting point the alleged $9,161,467 debt of the Daughters. Whatever else can be made of Exhibit “E”, it is not itself proof of the $9,161,467 figure. Decore v. Decore Peter B. Michalyshyn J. 201

41 What’s more, the only reference in Lyndon Decore’s affidavit to a sum now owing is at paragraph 16 and its reference to exhibit “E”. Para- graph 16 then calculates the sum of $1,849,630.95 still owing to the Sons by the Daughters as at November 4, 2014. Again, whatever else can be made of this part of Exhibit “E”, it does not itself prove the fact of the $1,849,630.95 figure. 42 Karyn Decore deposes, at paragraph 15 of her January 15, 2015 affi- davit, that the Daughters have never agreed with the figures set out in Lyndon Decore’s paragraph 10. Without more then, those facts are squarely in dispute. 43 Further, the Daughters disagree that Lyndon Decore’s ‘value of” figures are appraised values without regard for debt. As the Daughters argue, paragraph 5(3) of the Agreement requires that there be evidence of “the purchase price for all the shares and the debt of Maligne Lodge Ltd. and Tonquin Inn Ltd...” The Daughters argue persuasively that no such evidence is before the court. 44 The Daughters argue further that “purchase price” is not defined, nor is there a method specified to determine it. They argue yet further that the Bank of Nova debt of $3,570,000 is not the debt that is referred to in paragraph 5(3) of the Agreement. They dispute, correctly in my view, that the Agreement says anything about outstanding third party bank debt and/or its deductibility, as is argued by the Sons in their September 4, 2015 Brief. 45 The Sons’ September 4, 2015 Brief suggests that “of course” the debt referred to in the Agreement is “intercorporate debt” between Tonquin, Maligne, and Decore Holdings Inc. That is not admitted. Nor is it found in any sworn or undisputed evidence before the court. 46 Later in their same September 4, 2015 Brief the Sons refer to sched- ules in an accounting report which, read together, purport to set out $5,141,860 as “advances from Decore Holdings Inc.” None of this is agreed to by the Daughters. None of it is referred to in any affidavit or exhibit thereto sworn squarely in support of the Sons’ summary judg- ment application. (The $5,141,860 figure does appear as described at TAB G of the Sons’ “Book of Evidence” filed September 4, 2015. The evidentiary value of the Book of Evidence was never made certain. And the admissibility and/or validity of the report at TAB G is not admitted by the Daughters.) 47 The Daughters object to the accuracy and/or relevance of the figures at paragraph 10 in Lyndon Decore’s affidavit. Regarding Tonquin in par- 202 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

ticular, Karyn Decore deposes that the testamentary documents set up a method for valuing its shares. Another method was devised in the Agree- ment. It is Ms. Decore’s evidence that neither determination has been done. There is no sworn evidence to the contrary before the court. 48 There was some controversy whether the debt of $9,161,467 existed at the time of the November 27, 2009 Agreement. That was Lyndon De- core’s evidence in paragraph 10 of his November 20, 2014, sworn plainly and centrally in support of the Sons’ summary judgment application. 49 The Daughters say that contrary to the evidence of Lyndon Decore, the purchase price of the shares and debt of Maligne and Tonquin was not known at the time of the November 27, 2009 Agreement. Nor was the available financing. As such, the Daughters say, the amount of the debt could not have been known at the time of the Agreement. 50 Not surprisingly then, Lyndon Decore was cross-examined closely on paragraph 10 of his affidavit. On the first such cross-examination, on De- cember 9, 2014, he had little opportunity to answer questions around the figure before, through counsel, he agreed to undertake to provide the ba- sis for his averment at paragraph 10. (In the same transcript there was the unsurprising acknowledgment that counsel had drafted the affidavit later sworn by Mr. Decore.) 51 Mr. Decore was then examined on his undertaking responses, on Feb- ruary 25, 2015. At that time, and after some clarification around how Mr. Decore and his counsel had interpreted the undertakings, it emerged that ‘as at the November 27, 2009 Agreement’ Mr. Decore had nothing upon which to base his evidence of a $9,161,467 debt (with the exception of a document entitled “McNally 2007 Valuation”, which no one appeared to suggest was the basis for the debt figure). 52 The Sons state in their September 4, 2015 Brief that the Daughters are “quite right when they say that the actual indebtedness was not known as of the date of the original Settlement Agreement of November 27, 2009”. In their September 11, 2015 Brief the Sons say the Daughters “make much” of this, as though to suggest it is a point unworthy of serious consideration. 53 Unfortunately, that the Daughters were “quite right” and now “make much” of the point, was by no means obvious on a plain reading of Lyn- don Decore’s November 20, 2014 affidavit. That was only initially con- ceded, then made certain, after two cross examinations. Decore v. Decore Peter B. Michalyshyn J. 203

54 It is also no surprise that the Daughters pressed the point of the Sons’ knowledge of the debt. It was after all Mr. Decore who said under oath, for whatever reason, that he knew the exact size of the debt as of the date of the November 27, 2009 Agreement. It is now clear that he did not. 55 And so it is fine to say now that ‘of course’ the Daughters’ debt could not have been known as at November 27, 2009. But who knew what Mr. Decore intended to say when he swore his November 20, 2014 affidavit? And that the point is now ‘clarified’ unfortunately does little to resolve the disquiet I have around the Sons’ evidence more generally for sum- mary judgment purposes. 56 The Sons represent at para 26 of their September 4, 2015 Brief that Karyn Decore agreed with certain adjustments that gave rise to the $8,156,038 figure for Maligne Lodge Ltd. This is not correct, on a plain reading of Karyn Decore’s examination on affidavit March 4 & 5, 2015. In fact, she denied any understanding of the accountant’s tax assumption and did not adopt the same accountant’s calculations. The Sons contin- ued to misstate Karyn Decore’s evidence on this point at paragraph 16 of their September 11, 2015 Brief. 57 Similarly, the Sons represent at para 31 of their September 4, 2015 Brief that Karyn Decore agreed that a certain process was “appropriate”. That is also incorrect. In her cross-examination Ms. Decore simply agreed that an accountant had performed certain calculations to reach a $13,736,896 figure. She was not asked to adopt any process as appropri- ate, or otherwise. Nor was she asked to adopt the outcome of any process as correct. 58 There was much argument regarding Exhibit “E” to Lyndon Decore’s affidavit of November 20, 2014. Whatever else can be made of if, there appears to be little dispute that Exhibit “E” refers to estate assets offset- ting certain alleged debt owed by the Daughters to the Sons. The alleged debt mentioned in Exhibit “E” is the $9,161,467, the validity of which is objected to by the Daughters and, as noted above, not proven before me. Just on that basis Exhibit “E” loses most if not all of its force on the Sons’ application. 59 It is unnecessary then to deal with the Daughters’ submission that Ex- hibit “E” goes on to reduce the alleged indebtedness by subtracting vari- ous distributions from the estate, most notably (but not limited to) the $1.7 million Castle Mountain distribution. 60 Whether or not the figures at Exhibit “E” are “entirely synthetic” — as argued by the Daughters’ counsel — I do not hesitate to conclude that 204 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

for summary judgment purposes Exhibit “E” fails to prove the quantum of any amount owing as at November 27, 2009, or at November 20, 2014, or at any other time material to the proceedings. 61 For the reasons given, the Son’s summary judgment application is dismissed.

IV. The Daughters’ counterclaims 62 No one suggested that the legal test for summary judgment on a coun- terclaim is any different from the test set out earlier in these reasons. 63 The Daughters each counterclaimed on March 14, 2014. 64 The counterclaim of Nicole Decore does not purport to add Decore Holdings Inc (“DHI”) as a claimant. It states however that between Janu- ary, 2011 and September, 2013 DHI made payments to the Sons on its own behalf, in relation to certain bonus monies, and on Nicole Decore’s behalf, in relation to her share of the Daughter’s debt to the Sons. The counterclaim alleges an overpayment by DHI of $894,145.41, half of which ($447,072.70) Nicole Decore claims from the Sons. 65 Equally, Karyn Decore’s counterclaim, styled on her own behalf but also naming Decore Holdings Inc. (DHI) as a counter-claimant, alleges that DHI made payments on its own behalf and on behalf of the Daugh- ters, the effect of which was to give rise to the alleged $894,145.41 overpayment. 66 Before I turn to the merits of the counterclaims, I will deal with two threshold arguments raised by the Sons. The first is what the Sons them- selves style a “technical defence” based on rule 3.56(1) of the Alberta Rules of Court. The second is a limitations issue that arises only if the ‘technical defence’ is found to lack merit.

The ‘technical defence’ 67 The defence is that DHI is not a proper party in the counterclaim as it was not named as a party in the Sons’ Statement of Claim. 68 No one disagrees that DHI was the corporate person that made the overpayments alleged in the counterclaims. While denying the alleged over-payment, the Sons do not deny receiving certain funds from DHI. Decore v. Decore Peter B. Michalyshyn J. 205

69 The Sons rely on Lil Dude Ranch Ltd. v. 1229122 Alberta Inc., 2014 ABQB 39, 5 Alta. L.R. (6th) 154 (Alta. Q.B.), for the proposition that as Master Robertson said at paragraph 29: 29 It is manifestly clear that the former Rule 93(1) and Rule 3.56(1) say that only a defendant can advance a counterclaim. Although the wording of the new rule is slightly different than the former rule, they both say that a defendant can advance a counterclaim, and in doing so the defendant can add other parties as defendants-by-coun- terclaim in addition to the plaintiff. Neither the former rule nor the current rule admit of the possibility of adding a stranger to the pro- ceedings as a plaintiff-by-counterclaim. 70 The Master further noted the earlier authority, to the same effect, of Makarchuk v. Pollard, [1957] A.J. No. 38, 23 W.W.R. 617 (Alta. C.A.). That case held that a counterclaim made by a non-party is a nullity. Makarchuk remains good law in spite of numerous changes to the word- ings of rules since the late 1950s. It has been followed numerous times in the years that have followed, e.g., Saskatchewan v. Buskas, [1972] A.J. No. 111, [1973] 3 W.W.R. 4 (Alta. T.D.) at paras 13-16; Borgland v. Kleefeld, [1978] A.J. No. 101 (Alta. C.A.) at para 5; J.J. Catering Ltd. v. M.G.M. Developments Ltd., [1986] A.J. No. 538, 45 Alta. L.R. (2d) 318 (Alta. Master) at para 5; and Bhatt v. Hoogstraat, [1989] A.J. No. 927, 102 A.R. 336 (Alta. Master) at para 4. 71 The Daughters argue that Makarchuk was decided under an older rules’ regime; they argue that Lil Dude Ranch is not binding, so that it is open to me to consider particularly the Rule 1.2 arguments advanced before the Master, as laid out at paras 34-36 of his decision. 72 Like the Master, I agree there is strong appeal to the concept of ad- ding a new plaintiff by counterclaim to ensure that all necessary parties are before the court. But I also agree with the Master’s final conclusion that the proposed ‘re-interpretation’ of Rule 3.56(1), in light of long-es- tablished authority, would in fact ‘re-write’ the rule. 73 Two other approaches, not before the Master in Lil Dude Ranch, are before me. One arises on a consideration of s. 8 of the Judicature Act, RSA 2000 c. J-2, the other on a consideration of the reach of the Surro- gate Rules of Court in the action before the court, commenced under the general Rules of Court. 206 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Section 8 of the Judicature Act 74 Under the heading “General jurisdiction”, s. 8 of the Judicature Act states: 8 The Court in the exercise of its jurisdiction in every proceeding pending before it has power to grant and shall grant, either absolutely or on any reasonable terms and conditions that seem just to the Court, all remedies whatsoever to which any of the parties to the pro- ceeding may appear to be entitled in respect of any and every legal or equitable claim properly brought forward by them in the proceeding, so that as far as possible all matters in controversy between the par- ties can be completely determined and all multiplicity of legal pro- ceedings concerning those matters avoided. 75 Section 8 was not considered by the Master in Lil Dude Ranch. The Daughters argue this alters the Rule 3.56(1) outcome in the case before the court. 76 Section 8 is commonly relied on, most often procedurally, to avoid both waste and a multiplicity of proceedings: Allard v. Shaw Communications Inc., 2010 ABCA 316 (Alta. C.A.) at para 9. 77 Any number of further authorities may be cited for the role of s. 8 in support of those objectives, including for example: Jahnke v. Wylie (1993), 144 A.R. 188 (Alta. Q.B.), (reversed on appeal on other grounds, 1994 ABCA 350 (Alta. C.A.)) at para 104; Y. (W.J.) v. B. (S.J.), 2011 ABCA 37 (Alta. C.A.); Klychak v. Samchuk, 2012 ABQB 85 (Alta. Q.B.), at para 36. 78 In P. (R.) v. V. (R.), 2012 ABQB 353 (Alta. Q.B.), Hughes J discusses the inherent jurisdiction of the court and s. 8 and sets out a test for its application in the context of whether the court can exercise its discretion to grant a restraining order: 17 In R v Caron, 2011 SCC 5, [2011] 1 S.C.R. 78 at para. 24, the Supreme Court of Canada quoted with approval I. H. Jacob, “The Inherent Jurisdiction of the Court” (1970), 23 Curr. Legal Probs. 23, in describing inherent jurisdiction as: “a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so” ... These powers are derived “not from any statute or rule of law, but from the very nature of the court as a su- perior court of law” ... to enable “the judiciary to uphold, to protect and to fulfil the judicial function of administer- ing justice according to law in a regular, orderly and ef- fective manner”. [citations omitted] Decore v. Decore Peter B. Michalyshyn J. 207

20 This Court’s inherent jurisdiction and authority to grant equitable relief has been codified in the Alberta Judicature Act, R.S.A. 2000, c. J-2, ss. 8 and 13(2).[...] 79 To a similar effect, Veit J’s reasons in Lee v. Yoo, 2015 ABQB 522 (Alta. Q.B.) at paras 32-35. 80 In 3S Resources Inc. v. Improvisions Inc., 2014 ABQB 746 (Alta. Q.B.), at para 51, Greckol J, invoking s. 8, stated that she was also: ...mindful of the purposes of the Rules as set out at Rule 1.2. Those purposes include to “facilitate the quickest means of resolving a claim at the least expense” and to provide “an effective, efficient, and credible system of remedies and sanctions.” However, the foremost purpose is stated in Rule 1.2(1): to “provide a means by which claims can be fairly and justly resolved.” The Courts’ power under section 8 of the Judicature Act, RSA 2000, c J-2, is to grant all remedies, as far as possible, to completely determine matters in controversy and avoid multiplicity of proceedings. 81 Finally, and not least, s 8 attracted further attention worth mentioning in the very recent case of Pyrrha Design Inc. v. Plum, 2016 ABCA 12 (Alta. C.A.) at paras 8-10: [8] It is incontestable that a chambers judge possesses inherent juris- diction to control its process: De Shazo v Nations Energy Company Ltd, 2006 ABCA 400 (CanLII) at para 12, 401 AR 142; MacMillan Bloedel Ltd v Simpson, 1995 CanLII 57 (SCC), [1995] 4 SCR 725 at para 33, 130 DLR (4th) 385. This jurisdiction is also expressly granted by s. 8 of the Judicature Act, RSA 2000, c J-2, which pro- vides the court with power to grant any appropriate remedy that is appropriate in the discrete circumstances of a case: Nafie v Badaway, 2015 ABCA 36 (CanLII) at paras 97-98, 11 Alta LR (6th) 1; Bank of v Valerio, 2009 ABQB 578 (CanLII) at para 30, 480 AR 393. [9] Rule 1.3(1) of the Alberta Rules of Court is to like effect when it states that the Court may do either or both of: (a) give any relief or remedy described or referred to in the Judi- cature Act; or (b) give any relief or remedy described or referred to in or under these Rules or any enactment. Rule 1.3(2) specifically states that a “remedy may be granted by the Court whether or not it is claimed or sought in an action.” [10] And, quite apart from avoiding the multiplicity of actions — the mischief sought to be avoided by s 8 of the Judicature Act and R 1.3 208 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

of the Alberta Rules of Court, a proposition for which there is also ample case authority — the chambers judge properly adhered to the urging of the Supreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7 (CanLII), [2014] 1 SCR 87 to the effect that courts are obliged to resolve legal disputes in the most cost-effective and timely method available, provided the process selected ensures fairness be- tween the parties. Here, the chambers judge is to be commended, not criticized, for pursuing a cost-effective, timely final resolution to this litigation which was fair and just to the parties, as it simply serves no one’s interest to permit continuation of protracted and costly litiga- tion when it can be properly disposed of summarily and entirely. 82 As noted, the Daughters argued s. 8 of the Judicature Act in their original submissions before me. I invited and in turn received further written submissions from the parties on the applicability of s. 8, and on the relevance, if any, of the Surrogate Rules. 83 I specifically invited submissions on the question of: ... whether these applications are really in the nature of surrogate pro- ceedings, rather than civil proceedings, and, if that is so, then via s. 8 of the Judicature Act or otherwise are they liable to being converted to and governed by the Surrogate rules process rather than the civil rules? And if that is so, then does the “technical defence” necessarily remain? 84 Since inviting and receiving the parties’ further written submissions, I have obviously decided the issue of characterization. That is to say, I have rejected the Sons’ contention of a standalone contract giving rise to a debt action; I have accepted the Daughters’ view that even though framed by general rules’ pleadings, the parties remain engaged squarely in estate litigation. 85 (I pause to note that no application is before me and I am not now deciding anything about the inherent validity of the Sons’ proceeding by way of Statement of Claim under the general Rules of Court. As neither side wins on summary judgment, and failing agreement, the parties may need to seek further advice and direction on the future of the current proceedings.) 86 The Sons do argue persuasively and I accept that the reach of s. 8 stops short of affecting legislated rules (R. c. Caron, [2011] 1 S.C.R. 78, 2011 SCC 5 (S.C.C.), at para 32; Wilson (Next friend of) v. Aspen View Regional School, Division No. 19, 2014 ABQB 741 (Alta. Q.B.), at paras 17-33; 376599 Alberta Inc. v. Tanshaw Products Inc., 2005 ABQB 300 (Alta. Q.B.), at para 219). As such, I agree that Rule 3.56(1) as inter- Decore v. Decore Peter B. Michalyshyn J. 209

preted by authority binding on me, stands in the way, without more, of a s. 8 Judicature Act remedy in the circumstances of this case.

The reach of the Surrogate Rules 87 As noted, aside from s. 8 Judicature Act considerations, I had invited submissions with regard to the reach of surrogate rules process rather than the civil rules. 88 The Daughters have noted that by virtue of s. 4 of the Estate Adminis- tration Act SA 2014 c. E-12.5 both the general Rules of Court and the Surrogate Rules apply to any application or matter that arises in the ad- ministration of an estate under the Act. 89 I agree with the Daughters that the closer question is whether I can have recourse to the Surrogate Rules in a case such as this. The Daugh- ters refer to what they describe as the “broad curative provisions” of Sur- rogate Rule 2, which states: Rules of Court 2(1) The Alberta Rules of Court (AR 124/2010) apply to an applica- tion to the court if the matter is not otherwise dealt with under these Rules or the context indicates otherwise. (2) The court may vary any rule in any case where the court decides it is appropriate to do so. (3) Subrule (2) does not apply if the rule imposes a duty on the court. (4) If provision for a procedure or matter is not made in these Rules or is not included in and cannot be analogized to the Alberta Rules of Court (AR 124/2010), the court may make any order concerning it that is necessary or appropriate in the circumstances. 90 In Serdahely Estate, Re, 2003 ABCA 156 (Alta. C.A.), at para 8, the court recognized that Rule 2(2) of the Surrogate Rules preserves the court’s discretion to vary any rule “where the court decides it is appropri- ate to do so”. Serdahely Estate, Re was a case about the formal proof of a will. I do not read the Court of Appeal’s comment regarding Rule 2(2) to be limited to that context. The Court’s conclusion in the case before it, at para 9, is similar to the conclusion I have reached: In this case, the chambers judge carefully considered the issue of pleadings. He reasons that in this type of litigation, reliance on plead- ings would unreasonably protract and postpone the resolution of is- sues which were otherwise capable of being clearly and simply pre- scribed in the terms of the order. 210 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

91 In Serdahely Estate, Re, 2003 ABCA 311 (Alta. C.A.) the court con- sidered whether to give leave to re-argue certain issues decided in its earlier decision, including as to the application of Surrogate Rule 2(2). Leave to re-argue was denied. 92 (For other authorities which address the broad and wide reach of the Surrogate Rules: Charles v. Young, 2014 ABCA 200 (Alta. C.A.), at para 6-7; Saraceni v. Saraceni, 2013 ABCA 354 (Alta. C.A.), at para 16; Quaintance Estate, Re, 2006 ABCA 47 (Alta. C.A.) at para 18; Surrendi Estate v. Surrendi, 2001 ABQB 1099 (Alta. Q.B.).) 93 On the authority of Serdahely Estate, Re and other cases the door ap- pears very much open to the exercise of judicial discretion to fashion procedure under Surrogate Rule 2(2) that most broadly stated serves the ends of justice — procedure very much in keeping with the dictates of s. 8 of the Judicature Act and with Hryniak v. Mauldin. Indeed, there is no reason to doubt that Hryniak v. Mauldin and the many cases now follow- ing it, informs proceedings governed by the Surrogate Rules. Equally, there is every reason to accept that where appropriate s. 8 of the Judica- ture Act may be invoked in surrogate proceedings. 94 Nevertheless, I hesitate to decide whether or not Rule 3.56(1) applies based solely on the broad terms of Surrogate Rule 2(2), at least without some further consideration of the balance of Surrogate Rule 2, and in particular 2(1) and 2(4), and without some further consideration of the history and purpose of the Surrogate Rules, alongside the general Rules of Court.

Surrogate Rule 2(1) 95 With regard to Surrogate Rule 2(1), in the circumstances here I find that rule 3.56(1) does not apply to the applications before the court be- cause the matter in question — the participation of DHI as a plaintiff by counterclaim — is a matter capable of being dealt with otherwise under the Surrogate Rules’ broad ambit to fashion pleadings and procedure. Further, I find that the context of the applications supports that outcome. 96 Rule 3.56(1) is a very specific provision found at Part 3 of the Rules of Court which deals broadly with “Court Actions”, and Division 3 thereof, (“Actions Started by Statement of Claim”), and Subdivision 7 thereof (“Counterclaims”). 97 The Surrogate Rules too deal broadly with pleadings and parties. In particular, Part 2, Division 1 of the Surrogate Rules deals with “Conten- tious Matters”, which is clearly applicable here. The rules which follow Decore v. Decore Peter B. Michalyshyn J. 211

have long established a unique process for estate and related litigation. These rules also grant the court broad powers to fashion the procedure to be followed in the determination of such matters. Surrogate Rule 64 for example speaks to proceedings in chambers: Procedure at hearing 64(1) The court, on hearing an application, may (a) receive evidence by affidavit or orally; (b) dispose of the issues arising out of the application as it con- siders appropriate; (b.1) direct a person to file a reply, accompanied with an affidavit, if evidence is to be submitted, or a demand for notice; (c) direct a trial of issues arising out of the application; (d) grant any relief to which the applicant is entitled because of a breach of trust, wilful default or other misconduct of a respondent; (e) direct that notice of the court’s judgment or order be given to a particular person; (f) dispense with service of notice on any person if, in the opin- ion of the court, service is impractical; (g) subject to subrule (2), dispense with service of an order and order that a person is bound by the court’s order as if the per- son had received notice of it; (h) order costs to be paid from the estate or by any person who is a party to the application; (i) make any order that the court considers necessary in the circumstances. 98 Surrogate Rule 66 speaks to when the court orders the trial of an issue arising in a surrogate proceeding. In that event: ...the court must order the procedure to be followed and the terms and conditions under which the trial is to take place. 99 I have decided that the summary judgment applications before the court are in reality surrogate contentious matters. That they were brought under the form of the civil Rules of Court does not change that substan- tive finding. The Surrogate Rules, and in particular rule 64(1), are more than adequate to guide the commencement and unfolding of contentious surrogate matters. There is no good reason to import piecemeal certain provisions from the general Rules of Court, such as here, rule 3.56(1). Put another way, had these applications been brought in the form re- 212 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

quired by the Surrogate Rules, it is hardly likely that the parties would be arguing about the effect of general rule 3.56(1) — or if they were, hardly likely that the conclusion regarding the application of that general rule would be any different. 100 What’s more, the context of these proceedings before the court sup- ports that outcome. To avoid unnecessary repetition, on this point I refer to my comments made later in these reasons, under the heading of ‘The Limitations Act’.

Surrogate Rule 2(4) 101 With regard to Surrogate Rule 2(4), again I find that the Surrogate Rules do provide an appropriate procedure and therefore it is unnecessary to “analogize” to the Alberta Rules of Court, and in particular to Rule 3.56(1). 102 What’s more, and as stated in yet another version of Haljan v. Popke, 2003 ABCA 305 (Alta. C.A.), at para 11, where two enactments arguably apply, the court should attempt to construe them to fit together. Here, there is no reason to construe Rule 3.56(1) as applying when the broad powers under the surrogate process to fashion pleadings and procedure achieves an appropriate outcome.

The history and purpose of the Surrogate Rules 103 In reaching my conclusion regarding Rule 3.56(1) vis-`a-vis the Surro- gate Rules, I have been informed by a review of the origins the Surrogate Rules, and of their long-standing status alongside the general Rules of Court. 104 The starting point is the current Surrogate Rules, in force as Alberta Regulation 130/95 under the authority of the Judicature Act RSA 2000 c. J-2. The Alberta Rules of Court are in force separately, as Alberta Regu- lation 124/2010. Section 28.1(1)(a)(i) of the Judicature Act speaks to the Lieutenant Governor in Council’s authority to make rules governing the practice and procedure in the Court of Queen’s Bench. A separate provi- sion, s. 28.1(1)(b)(i), speaks to the related authority to make rules gov- erning surrogate matters in the Court of Queen’s Bench. 105 The two sets of Rules have long co-existed. In its modern form this co-existence is recognized for example by the authors of the Alberta Civil Procedure Handbook (2016) who note that: Though R. 2 of the Surrogate Rules incorporates the general Rules of Court, R. 2(2) of the Surrogate Rules gives the court an express Decore v. Decore Peter B. Michalyshyn J. 213

power to vary any Rule “where the court decided it is appropriate to do so” [citing Bolt v Popke, 2003 ABCA 156, 327 AR 314]. Obvi- ously that is confined to surrogate litigation. (at pp 1-13 to 1-14) 106 While the origins of surrogate jurisdiction can be traced back many, many hundreds of years, for now it is enough to look to the English Court of Probate Act, 1857 (Imp.), c. 77, which came into force in Janu- ary, 1858. That statute ended the jurisdiction of the ecclesiastical courts (in relation to personal property) and of the common law courts (in rela- tion to real property) over grants of probate and administration, to the extent that jurisdiction had not already been ceded to the Court of Chan- cery. (A fuller history is found at F.A. Inderwick QC, The King’s Peace: a Historical Sketch of the English Law Courts, 1895, at pp 219-221; also Hull Cullity Probate Practice (3rd ed., 1981) at pp. 1-19; and A.H. Oos- terhoff, Oosterhoff on Wills and Succession (7th ed., 2011), pp. 1-12.) 107 Jurisdiction under the Court of Probate Act was exercised by the Court of Probate for close to two decades before in 1875 that court be- came part of England’s newly-centralized Supreme Court of Judicature, then as part of the Probate, Divorce and Admiralty division: Supreme Court of Judicature Acts, 36 & 37 Vict., c. 66; 38 & 39 Vict., c. 77). 108 Before centralization however the 1858 Court of Probate was a court of record and notably, for the purposes of this case, was given its own rule-making powers. Rules were then brought into force in 1862. They defined, amongst other things, contentious and non-contentious business (Hull Cullity, at pp. 5-6, 13). These expressions continue to be used to- day in modern surrogate rules; no such language appears now, if it ever has, in the general Rules of Court. 109 Generally speaking English law was received in Alberta’s precursor, the North-West Territories, as that law stood on July 15, 1870. ‘Gener- ally speaking’, however, because that received law was in force only to the extent it had not been ‘repealed, altered, varied, modified or affected’ by subsequent legislation, and then only to the extent that it applied to the social and economic realities of what was then a sparsely-settled area such as Canada’s north-west territory (as more fully described by J.E. Cote “The Introduction of English Law into Alberta” (1964) 3 Alta Law Rev. 262) 110 And so while useful to review, it is not a complete answer to rely on the English law received by the North-West Territories in the form of the 1857 Court of Probate Act and the 1862 rules. Modification was already apparent for example as early as 1893, in what Ewing JA observed, in Re 214 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Rutherford Estate, at paras 21-22, was a “small body of rules relating to probate and letters of administration” in the North-West Territories Judi- cature Ordinance, 1893, No. 6. 111 From 1905 in Alberta, further modification of the law received from the North-West Territories took place by means of the Supreme Court Act, 1907, c. 3, and the District Courts Act 1907, c. 4. 112 At the superior court level, re-stated in full was the receipt of English law as at July 15, 1870 including the jurisdiction of “the judges of the Court of Probate in England” (ss. 5, 9(5)) and of the Court of Chancery (s. 11) being vested in the new Supreme Court of Alberta. Any rules then existing in the North-West Territories were carried forward, subject to any contrary intention being stated in the 1907 Alberta legislation. 113 As to the then-new District Court of Alberta, a certain administrative jurisdiction was initially conferred to it in probate matters, as laid out in s. 41 of the District Courts Act. Contentious business was generally ex- cluded, other than as to the validity of wills: s. 23 of the Act. Section 34 of the Act created authority to make rules within that court’s jurisdiction, absent which the Supreme Court rules would apply. 114 It appears that legislatively the District Court jurisdiction over surro- gate matters remained largely unchanged until 1967. In that year the Sur- rogate Court Act (SA 1967, c. 79) statutorily created the Surrogate Courts, one each for northern and southern Alberta. District Court judges became the judges of the Surrogate Court. District Court chief judges became also Surrogate Court chief judges. In turn, Surrogate Court judges took on a broad jurisdiction over: ... testamentary matters and causes, the issuing or revoking of grants of probate and administration and all matters arising out of or con- nected with the issue of revocation of grants of probate and adminis- tration. (s.12(1)) 115 What’s more, as of 1967 Surrogate Court judges were given broad powers over “testamentary matters and causes” (s. 12(1)) and all of the powers of superior court judges within that broad jurisdiction (s. 12(2)), including legal and equitable remedies (s. 15(b)). 116 The 1967 Act defined “rules” as the surrogate court rules: s. 2(h). And s. 17(1) of the same Act provided that: Except as otherwise provided by this Act or the Rules, the practice, procedure and rules of the Supreme Court, including the course of proceedings and practice in chambers, so far as they are applicable Decore v. Decore Peter B. Michalyshyn J. 215

and consistent with this Act and the Rules, apply to proceedings in a surrogate court. 117 This jurisdiction however was not exclusive: nothing in the Surrogate Court Act affected the Supreme Court of Alberta’s jurisdiction over sur- rogate matters, and in certain events cases could be removed to or from either of the courts: s. 21. 118 Questions of ‘shared jurisdiction’ between the District and Supreme courts became academic with the amalgamation of those two courts in the newly-named (as of June 30, 1979) superior court, the Court of Queen’s Bench of Alberta. 119 Soon before the courts’ amalgamation, the Surrogate Court was de- scribed, in the 1978 Annual Report of the Attorney General for Alberta, as a: ...relatively low volume, little-known, and specialized court [which] ... plays an important role in the administration of justice in the province. 120 (Ironically, before amalgamation the last Chief Justice of the District Court of Alberta — and also then Chief Justice of the Surrogate Court of Alberta — was the litigants’ grandfather, the Hon. John N. Decore.) 121 Soon after the 1979 amalgamation of the Supreme and District courts, the Surrogate Court was “continued” in the Court of Queen’s Bench, and the Surrogate Court Act repealed, on April 1, 2001: Justice Statutes Amendment Act, RSA 2000, c. 16. 122 Yet despite these changes, the Surrogate Rules remained a discrete collection of rules respecting surrogate practice, including contentious matters. 123 As noted above, before the 1967 Surrogate Court Act defined them, surrogate rules had long existed in England, in the North-West Territo- ries, and in Alberta. The 1914 Consolidated Rules of the Supreme Court of Alberta include, as a separate division, numbered 1-67, “Rules Relat- ing to Applications for And Grant of Letters of Administration, Probate and Guardianship”. Subsequent volumes of rules carry this description forward (e.g., the rules as amended to 1923, then referring to surrogate rules as numbered 922-989; as amended to 1954, then referring to surro- gate rules as “Part 59” and numbered 983-1052; and as brought into force as The Supreme Court Rules in 1968 (AR 390/68), then as Part 62, rules 861-926. 216 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

124 It was on February 28, 1971, pursuant to s. 23 of the Surrogate Court Act, the Rules of the Surrogate Court first came into being (AR 20/71) and Part 62 for the most part was struck out. The 1971 Surrogate Rules were then revisited some 20 years later, starting with the Alberta Law Reform Institute’s October, 1991 Report for Discussion No. 10, entitled “Revision of the Surrogate Rules”. 125 Under the heading “Philosophy” at page 5 the 1991 Report for Dis- cussion states: An overall philosophy drives the recommendations for [surrogate rule] change. That is that the system, although supervised by the court, is driven by the personal representative. 126 The 1991 Report also notes that beneficiaries must take some respon- sibility for protecting their own interests, and so notice to them (and in- deed to others interested in the estate) is of the utmost importance. 127 The 1991 Report notes a “logical continuum” set out in the surrogate rules, from straightforward estates which require no court intervention — ie, governed by the ‘non-contentious’ part of the rules — to those estates which find themselves subject to the ‘contentious business’ part of the rules, which apply if “an estate needs the further intervention or supervi- sion of the court” (at page 5): Different levels of court involvement may be required when the courts are asked to supervise any area of estate administration. Most issues can be handled in the Chambers setting. Only in more compli- cated matters will the court supervision move to the more detailed level of trial. Appeal procedures remain unchanged. (at page 6) 128 It is worth noting that the 1991 Report raised the question of aban- doning most of the surrogate rules’ approach in contentious matters, in favour of the general Alberta Rules of Court. In the end, however, the 1991 Report recommended that the then-current surrogate rules be re- written to provide a specific procedure for all estate contentious matters (excepting Proof in Solemn Form and Passing of Accounts), subject to, as had always been the case, a ‘fall-back’ provision to the general Rules of Court (now s. 2, but in the 1971 Rules, s. 51, which then ‘fell back’ not only to the Alberta Rules of Court but also to “...the practice [...] as in the Probate, Divorce and Admiralty Division of the High Court of Jus- tice of England”). 129 The 1991 Report for Discussion led to ALRI’s May, 1996 Report No. 73 “Revision of the Surrogate Rules: Final Report”. This report is styled a joint project of ALRI and of the Surrogate Rules Committee. Decore v. Decore Peter B. Michalyshyn J. 217

130 (The Surrogate Rules Committee had been struck in the mid-1970s by the Attorney General of Alberta, to review concerns and make recom- mendations relating to surrogate rules and practice. As noted, it played a key role in the mid-1990s Surrogate Rules’ revisions. It evolved by 2011 into the Surrogate Rules Advisory Committee, by Ministerial Order 22/2011. It is advisory to the Rules of Court Committee, the existence of which is separately recognized by s. 28.2(1) of the Judicature Act.) 131 Again under the heading of “Philosophy”, the 1996 Report noted amongst other things that “one court should have carriage of all applica- tions dealing with the administration of estates: There should be one estate file in court that builds all the estate infor- mation in one place. This is not only efficient, it also removes the need to repeat information from one court to another and from one application to another. (at page 4) 132 Yet again under the heading “Philosophy”, the 1996 Report explained further that: We wanted a comprehensive set of procedures that govern the ad- ministration of the estates of deceased persons. (at page 6) ... Secondly, we wanted a system that was driven by the personal repre- sentative of an estate with court intervention only when necessary. ... Thirdly, we needed some supervision of the personal representative that was not the court. We wanted to have a check on the personal representative to ensure that the estate administration began in a timely way and did not falter. Therefore, we gave responsibility to the beneficiaries to protect their own interests. To do this, benefi- ciaries must have notice that they have an interest to protect. (at page 7) ... Fourthly, should court intervention be necessary, the rules set out a standard procedure to get issues heard by the court whatever the na- ture of the application. (at page 7) 133 The ALRI/Surrogate Rules Committee work led to the enactment of new Surrogate Rules in 1995 (AR 130/95). 134 Significantly, the Surrogate Rules were untouched by the reforms which led to the new Rules of Court, in force as of November 1, 2010 (AR 124/2010). One of the core principles in the new Rules of Court was 218 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

that, on the whole, the parties were expected to manage their own litigation. 135 I take from this somewhat involved review of surrogate court and rule history, that for a very long time the legislature and others with rule- making powers and influence have honoured the distinction between rules for general civil litigation, and rules for contentious matters arising in the surrogate context including, as here, the administration of an estate. 136 Granted, this distinction is largely historical. But of course history in- forms the present, and the future. 137 The distinction between the general and surrogate rules is also purpo- sive: the courts’ broad discretion in surrogate matters to amongst other things fashion the pleadings and procedure is consistent with and serves the courts’ larger supervisory role in estate matters, to say nothing of guardianship/trusteeship matters. These are matters which often involve the validity and/or interpretation of the last intentions of a person — the deceased — who is before the court only indirectly through a personal representative, and sometimes imperfectly so. Or they are matters which often involve competing claims from persons (e.g., dependents, creditors, beneficiaries) who were not themselves party to the testator’s expressed last wishes. Or in the case of intestacy, they are matters involving the interpretation of legislation as it affects the unspoken wishes of the de- ceased, and the claims of would-be personal representatives, and dependants, creditors, beneficiaries. 138 None of this is to say that personal representatives, beneficiaries and others interested in an estate can never ‘manage their own litigation’ just as parties to general rules civil litigation are expected to do. But history and practice and the very nature of surrogate disputes suggests that there will be cases when the court is called on purposively to exercise its broad, supervisory jurisdiction under the Surrogate Rules. I find that this is one of those cases. 139 I have accordingly rejected the Sons’ approach in this case as it at- tempts to re-characterize what is clearly a contentious matter under sur- rogate jurisdiction as debt litigation to which the general Rules of Court apply, including recourse to the ‘technical defence’ offered by Rule 3.56(1). 140 The Sons’ approach does not flow from any intention of the parties, either stated or flowing logically from their agreements. It is not consis- tent with the intention of the testatrix. It is not in keeping with sound Decore v. Decore Peter B. Michalyshyn J. 219

surrogate practice. If allowed, it would result in an unnecessary multi- plicity of proceedings. It would tend to defeat the goal, stated in the 1996 Report mentioned above, that one court should have carriage of all appli- cations dealing with the administration of estates. And not least, it would limit the court’s discretion under a long-standing and purposive surrogate process to fashion the pleadings and procedure to serve the ends of jus- tice in the individual case. 141 In all of this, finally, I am mindful of the fact that the Sons are no strangers to the Surrogate Rules. They have brought multiple applica- tions under those rules in the action numbered ES03 125382, case man- aged initially by Justice Clackson, and now by me. The October 21, 2010 application in particular, sought much the same relief the Sons now seek in their ‘debt’ Statement of Claim. That surrogate application sought a declaration of security in favour of the Sons in respect of Maligne and Tonquin flowing from the November 27, 2009 Agreement. The security was to be an equitable mortgage. The application was supported by Lyn- don Decore’s affidavit sworn October 21, 2010. It was brought under Surrogate Rules 4 and 55-70. 142 The October 21, 2010 application led to the Consent Order of Decem- ber 13, 2010, which amongst other things, gives the Sons the security on which they now sue. 143 This is not to say that the October 21, 2010 application brought under the Surrogate Rules is identical to the November 15, 2013 Statement of Claim brought under the general Rules of Court. If only given the pas- sage of time, the latter pleading raises the December 13, 2010 Consent Order and the December 8, 2010 Supplemental Agreement that came shortly before that Consent Order. 144 Again, however, none of this obviously makes the alleged indebted- ness a standalone issue that the parties intended or agreed could/should be enforced outside of the estate proceedings. 145 Indeed, paragraph of 15 of the Statement of Claim suggests just the contrary: 15. After applying all amounts received from the Estate, all payments made after repayment of the Bonus Monies, there remains owing, as at October 31, 2013, the sum of $1,708,618.37, which continues to accrue interest at 8% per annum, calculated and compounded semi- annually. 220 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

146 How that is not a claim inextricably bound to the estate and its admin- istration is not something the Sons have satisfactorily explained in their application for summary judgment. 147 Indeed, it is worth asking if the existence of October 21, 2010 appli- cation undermines the Sons’ contention that from the time of the Novem- ber 27, 2009 Agreement they always believed they had a standalone con- tract that could be enforced outside the Will, and litigated outside the Surrogate Rules. 148 I acknowledge the Sons’ argument that the Daughters’ counterclaim amounts to an ‘election’ to litigate under the general Rules of Court. I know of no authority that allows a party, without more, to ‘elect’ out of rules that appropriately govern their proceedings. 149 At the end of the day, I find for reasons stated, and in the absence of any evidence of prejudice, that the Sons’ ‘technical defence’ fails. It fol- lows, whether by way of a nunc pro tunc order (as suggested by the Daughters, citing Nafie v. Badawy, 2015 ABCA 36, [2015] A.J. No. 85 (Alta. C.A.), at paras 95-98, or by resort to Surrogate Rules 2 and 55-70, that DHI should be added as a proper party to the proceedings before the court.

The Limitations Act 150 In their recent written submissions, the Sons raise, for the first time, the Limitations Act RSA 2000 c.L-11, s. 3. They note that more than two years has passed since DHI made any alleged overpayment to the Sons. As such, they say DHI is out of time now to commence a separate pro- ceeding. (When the Sons defended the Daughters’ counterclaim, the lim- itation period had not yet passed, so logically it was not then pleaded.) 151 The Daughters respond by noting that the Sons’ Limitations Act argu- ment is raised in violation of Rule 13.6(3)(q). 152 More importantly, the Daughters say, the Sons’ position ignores s. 6(3) of the Limitations Act, which states: Claims added to a proceeding 6(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied. [...] Decore v. Decore Peter B. Michalyshyn J. 221

(3) When the added claim adds or substitutes a claimant, or changes the capacity in which a claimant sues, (a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, (b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits, and (c) the court must be satisfied that the added claim is necessary or desirable to ensure the effective enforcement of the claims originally asserted or intended to be asserted in the proceeding. 153 This provision has been interpreted plainly in Stout Estate v. Golinowski Estate, 2002 ABCA 49, 299 A.R. 13 (Alta. C.A.); 1036122 Alberta Ltd. v. Khurana, [2012] A.J. No. 7, 2012 ABCA 10 (Alta. C.A.). 154 I agree with the Daughters’ submission that each of the conditions in s. 6(3) is plainly satisfied in the circumstances of this case. 155 Regarding s. 6(3)(a), the May 13, 2014 counterclaim adding DHI clearly relates to the conduct, transaction or events described in the origi- nal pleadings. The role of DHI runs throughout the evidence and argu- ments of the parties, e.g., the Sons’ Brief filed September 4, 2015, at para 78, mentioning that “practically” alleged debts of DHI and of the Daugh- ters have been “dealt with as one debt”, and that the Sons had agreed with the Daughters’ proposal to take the shares of Tonquin and Maligne through DHI, and to accept payments from DHI as at least part of the estate equalization process. 156 Regarding s. 6(3)(b) — and mindful of the onus placed on the defen- dant Sons by s. 6(5)(b) of the Limitations Act — there is no reason to doubt that within the limitation period and time for service the Sons had received sufficient knowledge of the added claim that they will not be prejudiced in maintaining a defence on the merits. 157 Finally, regarding s. 6(3)(c), I am satisfied that for the purposes of s. 6(3)(c) the added claim is necessary and desirable.

The merits of the Daughters’ application 158 The Sons’ technical defence and limitations issues having been dealt with, I now turn to the merits of the Daughters’ applications for summary 222 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

judgment on the counterclaims. For reasons which follow the applica- tions fail. 159 The counterclaims each allege that between January, 2011 and Sep- tember, 2013 the Daughters, through DHI, overpaid the Sons to the ex- tent of $894,145.41. The Daughters allege they paid on the basis of cal- culations provided by the Sons; they further allege those calculations were incorrect or included amounts not payable to the Sons. 160 Neither of the counterclaims allege that on deciding the ‘interest-ow- ing’ issue, all other claims on the estate will be resolved. 161 Critical to the success of the Daughters’ summary judgment applica- tions is whether I can find on the evidence that the parties intended and agreed to be governed by a precisely enumerated ‘cash to close’ figure of $3,852,577.32, as laid out under the so-called “Deloitte column” of Schedule A to the Supplemental Agreement of December 8, 2010. 162 As will be apparent from what follows, I am unable to make that finding.

The applicable law 163 The parties all relied on Bhasin v. Hrynew, 2013 ABCA 98, [2013] A.J. No. 395 (Alta. C.A.) (reversed at 2014 SCC 71, [2014] 3 S.C.R. 494 (S.C.C.)) as their starting point for the interpretation of an agreement such as the Supplemental Agreement before the court. 164 I have also had regard for the law as stated in Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53 (S.C.C.) (CanLII), itself recently in- terpreted in Vandal v. Cousineau, 2015 ABCA 408 (Alta. C.A.), in par- ticular on the role of so-called ‘context’ evidence. (No one in these appli- cations argued for the admission of parole evidence as such.) In Valdal, at para 9, the majority stated as follows: [9] The decision in Sattva has expanded the type of evidence that is now admissible on the interpretation of contract, but the admissible evidence is still limited: 57 While the surrounding circumstances will be consid- ered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agree- ment (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objec- tive intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual Decore v. Decore Peter B. Michalyshyn J. 223

provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc v BC Tel Mobil- ity Cellular Inc (1997), 1997 CanLII 4085 (BC CA), 101 B.C.A.C. 62). 58 The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will nec- essarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the con- tract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowl- edge of both parties at or before the date of contracting... . 59 It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule. The parol evidence rule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict a contract that has been wholly reduced to writing (King, at para. 35; and Hall, at p. 53). To this end, the rule precludes, among other things, evidence of the subjective intentions of the parties... . (emphasis added) Even Sattva does not permit a contracting party to testify: “I believe the words of the contract mean such”. Thus, the evidence of the ap- pellant and the respondent about their subjective intentions is of lim- ited assistance, if it is even admissible.

Evidence of the agreement 165 In addition to the Supplemental Agreement and attached Schedule A, also before me are many hundreds of pages of ‘evidence’ comprised of the affidavits (including exhibits) of Karyn Decore and Lyndon Decore, extensive cross-examinations on those affidavits, and voluminous under- taking responses from those cross-examinations. Also before me are filed but unsworn volumes entitled “Book of Evidence” (for the Sons) and “Key Documents and Authorities” (for the Daughters). 224 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

166 Much of this evidence is beyond the scope of what I can consider when attempting to interpret the Supplemental Agreement, including a Sattva consideration for the circumstances surrounding that agreement. 167 In their affidavits and evidence on cross-examination both Karyn De- core and Lyndon Decore speak to their subjective belief of what they had or had not agreed to, and why. As noted in Vandal v. Cousineau, such evidence is of limited assistance, if it is even admissible. 168 Likewise, much of the documentary evidence before the court is of limited, if any, assistance. I acknowledge that many records are exhibited to sworn affidavits. They are nevertheless the records of third parties, in many cases the records of the parties’ counsel or accounting experts. Few of these records ‘speak for themselves’. 169 There is then a whole category of records, whether exhibited or other- wise, that are clearly inadmissible, on the basis that they are records which post-date the December 8, 2010 agreement in question. Once again, Sattva is clear that ‘context’ evidence is admissible only regard- ing: ...the background facts at the time of the execution of the contract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. (at para 58, emphasis added) 170 The Daughters point to correspondence (and to a caveat, exhibited to Ms. Decore’s affidavit) that post-dates the Supplemental Agreement, cor- respondence they say supports their reliance on the ‘cash to close’ figure of $3,852,577.32. However consistent that correspondence may appear to be with the Daughters’ position, it does not properly inform my interpre- tation of what the parties agreed to on December 8, 2010.

Schedule A to the Supplemental Agreement 171 Schedule A is referred to at paragraph 7 of the Supplemental Agree- ment. Paragraph 7 states: A detailed review of the KPMG starting numbers, attached hereto as Schedule “A”, will not be conducted and Schedule “A” will be ad- justed for actual cash balances, cash paid out, expenses incurred but not reflected, and expenses to be incurred with the amounts being filled in to the chart attached as Schedule “A”, including the $500,000.00 referred to in paragraph 2, above. Decore v. Decore Peter B. Michalyshyn J. 225

172 Schedule “A” has two columns, the first entitled “Per KPMG Draft Plan 14-May-10” (“the KPMG column”), the second entitled “Per Deloitte Proposed Changes 08-Jul-10” (“the Deloitte column”). 173 There is a line item in Schedule “A”, described as “Share of DHI debt and shareholder loan — Cash to Close for Daughters less distributions made”. This line item indicates the figure $3,852,577.37 in the Deloitte column; the figure $6,196,517.48 appears in the KPMG column; 174 There is nothing in Schedule “A” itself, or in the Supplemental Agreement itself, that further explains these discrepant figures in Sched- ule “A”. 175 Nor are these the only such figures — most notably, the estimate of Estate value for distribution is more than $2 million apart (the KPMG figure being the higher of the two). There is much evidence, and argu- ment on the evidence, attempting to explain these discrepancies. I find that little of it helps explain what the parties had agreed to, on December 8, 2010. 176 The Daughters note that so-called “Silvertip Shares” of $1.7 million, mentioned in the Deloitte column of Schedule “A”, are the same as “Cas- tle Mountain Chalets” mentioned at paragraph 1 of the Supplemental Agreement. The KPMG column does not include a value for “Silvertip Shares”. The Daughters argue accordingly that it must be the Deloitte column the parties intended to be bound by, because it includes the “Silvertip Shares” which are themselves mentioned in the Supplemental Agreement. 177 Unfortunately, without more I am unable to agree that this coinci- dence between paragraph 1 of the Supplemental Agreement and the Silvertip Share reference on Schedule “A” leads clearly to the conclusion that the parties agreed to be governed by the Deloitte column. 178 What else is there to inform the ‘choice’ of column? 179 To begin, it must be asked — why the parties left unsaid in the Sup- plemental Agreement just which column — if either of them — they in- tended to govern? 180 Further, what meaning is to be given the phrase in paragraph 7 that “A detailed review of the KPMG starting numbers, attached hereto as Schedule “A”, will not be conducted”? Arguably that speaks favourably to the KPMG numbers, not the other way around. 181 Unlike the KPMG column, nowhere is the Deloitte column even men- tioned in the text of the Supplemental Agreement. 226 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

182 On their face both columns appear tentative: the KPMG column is called “draft”; the Deloitte column is called “proposed changes”. There is little if any context evidence around these descriptions. On their face, it is questionable that either are final and binding figures. 183 Granted, the Deloitte column comes chronologically after the KMPG column. But as it is dated July 8, 2010, the Deloitte column is hardly contemporaneous with the December 8, 2010 agreement. 184 Of all the evidence before the court, admissible as ‘context’ evidence or otherwise, little of it speaks directly to the emergence of Schedule “A” and to the choice of columns. 185 Doubtless the Supplemental Agreement came about as the parties wished to reach an overall resolution of the estate. However, paragraph 7 of the agreement is ample evidence that much was left to be worked out and agreed to. That included Schedule “A” itself, as paragraph 7 of the agreement contemplated that certain amounts would be “filled in to the chart attached as Schedule ‘A’”. 186 The Sons refer to a $750,000 sum in the KPMG column to the credit of the Daughters as at December 8, 2010. They note evidence that it was only subsequently that the Daughters agreed to give the Sons the same $750,000. This is some evidence, the Sons argue, for the KPMG column governing the parties. 187 I acknowledge that leading up to the Supplemental Agreement there is some evidence of an October 20, 2010 email between counsel for the parties. That email mentions amongst other things a $3,852,577.37 ‘cash to close’ figure. It asks ‘are we close enough to write this up’? 188 I acknowledge further that the notion of a ‘closing’ arose long before the Supplemental Agreement; it was mentioned at paragraph 13 of the original 2009 Agreement. That concludes nothing however as to which ‘cash to close’ figure — if either of them — the parties were bound to on December 8, 2010. 189 Karyn Decore testified in cross-examination on affidavit that she first recalled the use of ‘cash to close’ terminology, and the approximate fig- ure of $3.8 million, around the time the Supplemental Agreement was negotiated and signed; she agreed that at least as of the Schedule “A” attached to the December 8, 2010 Supplemental Agreement, the figure was “fixed” at $3,852,577.37; she stated it was the sum the Daughters were able to raise and had agreed to pay to the Sons, “on the shortfall from April, 2010”; that figure was meant to be part of the overall equali- Decore v. Decore Peter B. Michalyshyn J. 227

zation of the estate proceeds between the beneficiaries, in particular on account of the Daughters exercising the option in the will to purchase the Maligne property. 190 If Ms. Decore’s evidence on these points is admissible as ‘context’, or is more than her subjective understanding of the agreement, then so too is Lyndon Decore’s evidence given on cross-examination on affidavit. Amongst other things, Mr. Decore testified that various references to ‘cash to close’ of $3,852,577.37 are to an arbitrary figure that the Sons did not accept as being the sum payable by the Daughters on account of the original November 27, 2009 Agreement. 191 In the end, the Daughters’ claim for the return of excess interest is grounded on proof of the starting point of the $3,852.577.37 cash to close. On reading the Supplemental Agreement as a whole, and mindful of the context evidence before me, I am unable to conclude on summary judgment that the parties intended and agreed to be governed by the Deloitte column of Schedule “A”, and in particular by the cash to close figure of $3,852.577.37. To paraphrase the test set out above in Pyrrha Design, at para 19, on the whole I am unable to accept that the Daugh- ters’ claim is so compelling that the likelihood it will succeed is very high such that it should be determined summarily.

The alleged accounting error 192 Although I have dismissed the Daughters’ summary judgment appli- cation, it is not because of any evidence or argument before the court regarding a so-called alleged accounting error. 193 In their initial brief filed September 4, 2015 the Sons addressed what they called the “Daughters’ Anticipated Argument” — that the Daugh- ters are seeking to “take advantage of a very large accounting error in their favour”. The Sons repeat in their September 11, 2015 Brief that the Daughters are raising the alleged accounting error to their advantage. 194 These submissions are misleading in that nowhere in the January 15, 2015 Affidavit of Karyn Decore, nor in any Brief filed on behalf of the Daughters, do the Daughters directly raise an alleged accounting error in their favour, or at all. (Karyn Decore’s filed Statement of Defence does raise the alleged accounting error, but denies that the alleged error, which is not admitted, is not a permissible adjustment pursuant to clause 7 of the Supplemental Agreement.) 195 Granted, counsel for the Sons cross examined Karyn Decore at length on the alleged accounting error. It can fairly be said that counsel gained 228 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

no admission that any error had occurred, not arising from the evidence, and not to her knowledge. Ms. Decore was clear that she did not agree with the figures or statements or admissions put to her from third-party accounting and other records; attempts to ‘prove the point’ by taking her through a host of records was, in the end, ineffective; the exercise by examining counsel plainly left her “lost” (at p. 91). As Ms. Decore put it near the end of a nearly 200-page transcript: ...you have walked me through these numbers to help me explain things, but I still don’t have an understanding of really what hap- pened, if anything. (at p. 195) 196 This cross examination took place in early March, 2015. It was on Karyn Decore’s affidavit sworn in opposition to the Sons’ summary judgment application, and in support of the Daughters’ own summary judgment application. Having gained no admissions from Ms. Decore re- garding the ‘alleged accounting error’, the Sons adduced no further direct evidence of such an alleged error in the months that followed leading to materials being filed in early September, 2015. 197 The only evidence then of an alleged error is a copy of a KPMG email dated December 17, 2012. It forms part of the Sons’ production, and answers to undertakings of Lyndon Decore, and is referred to by counsel in his Brief filed September 11, 2015, albeit in a footnote only. It is therefore hearsay as its author has sworn no evidence before the court in connection with it. Nevertheless, the email states: The primary difference between this schedule and the one we pre- pared in May 2010 is the inclusion of debt of Amalco associated with Silvertip. As you will recall, our May 2010 spreadsheet included an amount in this regard. The settlement offer made by Karyn and Ni- cole contained a schedule that deleted this amount. In January of 2011 we were asked to update the numbers based on the plan of dis- tribution based on the Felesky Flynn schedule. At that time we were instructed to reduce the debt owed to the Estate by the amount of the increase in the Silvertip receivable with DHI. In error we reduced the debt by twice the amount... 198 There is also some evidence, again hearsay and not sworn but appear- ing in the Sons’ production, of a January 13, 2011 KPMG letter and at- tached schedule. 199 If the December 17, 2012 email is some evidence of an alleged ac- counting error, then on its face the alleged error occurred in January, 2011. If the alleged error occurred on some other occasion, there is no evidence of any other date before the court. Decore v. Decore Peter B. Michalyshyn J. 229

200 For what it’s worth, I note that in his own cross-examination on affi- davit on December 9, 2014, Lyndon Decore — indeed in re-examina- tion — testified at p. 172 that the author of the alleged accounting error told him that the second deduction occurred in the letter of January, 2011. 201 The occurrence date of the alleged accounting error appears of some importance, given that it appears to have been made, if at all, only after the December 8, 2010 Supplemental Agreement and after the preparation of Schedule A to that agreement. 202 In their Brief filed September 4, 2015, the Sons argue that this “very large accounting in their favour [is] shown in the Schedule attached to the Supplemental Agreement” (at para 99). 203 In her reply Brief of September 11, 2015 Karyn Decore responds, persuasively, that no alleged accounting error is evident from the Sched- ule to the Supplementary Agreement. That position is entirely consistent with the fact the Sons’ counsel failed to gain any admission on the point from Ms. Decore in earlier cross examination. It also appears consistent with Lyndon Decore’s own re-examination evidence. Neither in that re- examination, nor in any other evidence before me, has Mr. Decore identi- fied clearly any accounting error in Schedule A to the Supplementary Agreement. What’s more, nowhere in the Sons’ evidence is the quantum of the alleged error identified. 204 Through counsel Karyn Decore further argues that no other evidence of an alleged error is before the court. In fairness, collectively the De- cember 17, 2012 KPMG email and earlier 2011 letter is some evidence. But given that they appear to identify an alleged error that occurred after the Supplementary Agreement, like Ms. Decore, I am lost as to its rele- vance in the matters before the court. 205 The Sons appear to attach some significance to the allegation that at the time of the alleged error KPMG were the accountants for both the co- executors and the Daughters. That is by no means clear on the evidence: Karyn Decore was closely cross-examined on the point in early March, 2015; although unsure of exact dates, she believed KPMG ceased to be the Daughters’ accountants in 2009 or 2010. (I acknowledge that in yet further re-examination on his affidavit, on December 9, 2014, Lyndon Decore testified that KPMG were the Daughters’ accountants in 2011; unfortunately Mr. Decore was not asked to provide basis for that evi- dence, failing which I would not elevate it above Karyn Decore’s evi- dence on the same point. At the end of the day, the evidence is inconclu- 230 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

sive.) I have already addressed the uncertainty in the evidence of any alleged error having occurred sooner than January, 2011. 206 Having considered all of the available evidence, and having made every effort to understand the many arguments advanced on behalf of the Sons, I am unable to conclude that any accounting error is proven, or if proven, is relevant to the Supplemental Agreement between the parties.

V. Conclusion 207 For the reasons stated, the competing summary judgment applications are dismissed. 208 The Sons argued for a finding that the Daughters have acted with a lack of good faith. There is no evidence before me to support such a finding. The written and oral submissions on the point are without merit. 209 If they cannot agree, the parties may speak to costs. Applications dismissed. R. v. Warring 231

[Indexed as: R. v. Warring] Her Majesty the Queen, Crown and Gurpreet Singh Warring, Accused Alberta Court of Queen’s Bench Docket: Calgary 111009148Q3 2016 ABQB 236 M. David Gates J. Heard: January 27, 2016 Judgment: April 25, 2016 Criminal law –––– Charter of Rights and Freedoms — Right to be tried within reasonable time [s. 11(b)] — General principles –––– Accused was ini- tially charged with two counts of trafficking and two counts of possession of proceeds of crime — Later, twenty-six count replacement information was sworn separately charging accused with same five offences and jointly charging him and others with possession of heroin for purposes of trafficking, and posses- sion of marihuana, in amount not exceeding three kilograms, for purposes of trafficking — Issue arose regarding counsel representing same co-accused and later new counsel was obtained — Accused later taken into custody on a new charge of break, enter and theft — Crown signed new indictment charging ac- cused with two counts of trafficking in heroin, and co-accused from earlier charges also indicted — Accused found guilty of two counts of trafficking co- caine to undercover police officer — Charges against certain other accused were stayed on basis of right to be tried within reasonable time, contrary to s. 11(b) of Canadian Charter of Rights and Freedoms — Accused brought application for stay of proceedings — Application dismissed — Total delay from institution of proceedings to date of application was approximately 52 months — Accused had waived at least thirty one months of delay through his agreement to dates set for preliminary inquiry and trial — Failure to comply with notice requirements was not bar to application, but was to be taken into consideration — Timing of application, following conviction, was highly problematic — When all circum- stances considered, accused waived entire time period and was precluded from complaining about delay — Accused was represented by experienced counsel, and every adjournment was initiated or consented to by counsel, which was in- consistent with desire for expeditious trial — Not open to accused to await out- come of trial and, if unsuccessful raise for first time following conviction that his right to trial within reasonable time has been breached — Application was motivated by finding of guilt and determination regarding other accused — Other accused had brought Charter motion at commencement of trial. 232 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Cases considered by M. David Gates J.: R. c. Brassard (1993), 160 N.R. 247, 85 C.C.C. (3d) 287, [1993] 4 S.C.R. 287, 58 Q.A.C. 261, 1993 CarswellQue 168, 1993 CarswellQue 168F, [1993] S.C.J. No. 124, EYB 1993-67886 (S.C.C.) — considered R. v. Adam (2006), 2006 BCSC 350, 2006 CarswellBC 822, [2006] B.C.J. No. 535 (B.C. S.C.) — considered R. v. Alcantara (2015), 2015 ABCA 259, 2015 CarswellAlta 1476, [2015] A.J. No. 883, [2015] 12 W.W.R. 655, 22 Alta. L.R. (6th) 95, 328 C.C.C. (3d) 293, 606 A.R. 313, 652 W.A.C. 313, 339 C.R.R. (2d) 243 (Alta. C.A.) — considered R. v. Askov (1990), 79 C.R. (3d) 273, 59 C.C.C. (3d) 449, 49 C.R.R. 1, 74 D.L.R. (4th) 355, 75 O.R. (2d) 673, [1990] 2 S.C.R. 1199, 113 N.R. 241, 42 O.A.C. 81, 1990 CarswellOnt 111, 1990 CarswellOnt 1005, [1990] S.C.J. No. 106, [1990] A.C.S. No. 106 (S.C.C.) — followed R. v. Atkinson (1991), 5 O.R. (3d) 301, 68 C.C.C. (3d) 109, 50 O.A.C. 48, 1991 CarswellOnt 723, [1991] O.J. No. 1913 (Ont. C.A.) — considered R. v. Beason (1983), 43 O.R. (2d) 65, 7 C.C.C. (3d) 20, 36 C.R. (3d) 73, 1 D.L.R. (4th) 218, 7 C.R.R. 65, 1983 CarswellOnt 99, [1983] O.J. No. 3151 (Ont. C.A.) — referred to R. v. Beauchamp (2008), 2008 CarswellOnt 7974, [2008] O.J. No. 5315 (Ont. S.C.J.) — referred to R. v. Bennett (1991), 3 O.R. (3d) 193, 6 C.R. (4th) 22, 7 C.R.R. (2d) 145, 64 C.C.C. (3d) 449, 46 O.A.C. 99, 1991 CarswellOnt 96, [1991] O.J. No. 884 (Ont. C.A.) — referred to R. v. Bennett (1992), 138 N.R. 388, 54 O.A.C. 350, 9 O.R. (3d) 276, 9 C.R.R. (2d) 195, 74 C.C.C. (3d) 384 (note), 1992 CarswellOnt 993, 1992 Carswell- Ont 1460, [1992] 2 S.C.R. 168, EYB 1992-67534, [1992] S.C.J. No. 58 (S.C.C.) — referred to R. v. Bosley (1992), 18 C.R. (4th) 347, 59 O.A.C. 161, 1992 CarswellOnt 125, [1992] O.J. No. 2656 (Ont. C.A.) — referred to R. v. Caines (2011), 2011 ABQB 82, 2011 CarswellAlta 181, [2011] A.J. No. 166, 230 C.R.R. (2d) 106, [2011] 9 W.W.R. 275, 43 Alta. L.R. (5th) 226 (Alta. Q.B.) — considered R. v. Con-Drain Co. (1983) Ltd. (2008), 2008 ONCJ 114, 2008 CarswellOnt 1424, [2008] O.J. No. 1012, 172 C.R.R. (2d) 299 (Ont. C.J.) — considered R. v. Conway (1989), [1989] 1 S.C.R. 1659, 96 N.R. 241, 34 O.A.C. 165, 49 C.C.C. (3d) 289, 70 C.R. (3d) 209, 40 C.R.R. 1, 1989 CarswellOnt 94, 1989 CarswellOnt 962, EYB 1989-67460, [1989] S.C.J. No. 70 (S.C.C.) — followed R. v. D. (C.) (2014), 2014 ABCA 392, 2014 CarswellAlta 2276, [2014] A.J. No. 1308, 588 A.R. 82, 626 W.A.C. 82 (Alta. C.A.) — considered R. v. Warring 233

R. v. Dwernychuk (1992), 42 M.V.R. (2d) 237, 135 A.R. 31, 33 W.A.C. 31, 12 C.R.R. (2d) 175, 77 C.C.C. (3d) 385, 1992 CarswellAlta 263, [1992] A.J. No. 1058, 1992 ABCA 316 (Alta. C.A.) — considered R. v. Dwernychuk (1993), 79 C.C.C. (3d) vi, [1993] 2 S.C.R. vii, 14 C.R.R. (2d) 192n, 151 N.R. 400 (note), 141 A.R. 317 (note), 46 W.A.C. 317 (note), [1993] S.C.C.A. No. 30 (S.C.C.) — referred to R. v. Gallant (1998), 1998 CarswellPEI 85, 231 N.R. 190, 19 C.R. (5th) 302, 128 C.C.C. (3d) 509, 165 D.L.R. (4th) 219, 168 Nfld. & P.E.I.R. 126, 517 A.P.R. 126, 56 C.R.R. (2d) 212, [1998] 3 S.C.R. 80, 1998 CarswellPEI 86, [1998] S.C.J. No. 73 (S.C.C.) — referred to R. v. Geene (2009), 2009 ONCA 329, 2009 CarswellOnt 2154, (sub nom. R. v. Austin) 248 O.A.C. 189, [2009] O.J. No. 1669, (sub nom. R. v. Austin) 245 C.C.C. (3d) 284 (Ont. C.A.) — considered R. v. Ghavami (2010), 2010 BCCA 126, 2010 CarswellBC 549, 253 C.C.C. (3d) 74, [2010] B.C.J. No. 416, 284 B.C.A.C. 286, 207 C.R.R. (2d) 213 (B.C. C.A.) — considered R. v. Godin (2009), 2009 SCC 26, 2009 CarswellOnt 3100, 2009 CarswellOnt 3101, [2009] S.C.J. No. 26, 389 N.R. 1, 245 C.C.C. (3d) 271, 67 C.R. (6th) 95, 309 D.L.R. (4th) 149, 252 O.A.C. 377, [2009] 2 S.C.R. 3, 192 C.R.R. (2d) 184, EYB 2009-159757, [2009] A.C.S. No. 26 (S.C.C.) — followed R. v. Goodkey (2013), 2013 BCSC 1431, 2013 CarswellBC 2404, [2013] B.C.J. No. 1740 (B.C. S.C.) — considered R. v. Heikel (1992), 72 C.C.C. (3d) 481, 125 A.R. 298, 14 W.A.C. 298, 10 C.R.R. (2d) 72, 1992 CarswellAlta 679, [1992] A.J. No. 489, 1992 ABCA 142 (Alta. C.A.) — referred to R. v. Henry (2004), 2004 ABQB 440, 2004 CarswellAlta 785, 362 A.R. 309, [2004] A.J. No. 694 (Alta. Q.B.) — considered R. v. Koruz (1992), 72 C.C.C. (3d) 353, 10 C.R.R. (2d) 113, 125 A.R. 161, 14 W.A.C. 161, 1992 CarswellAlta 583, [1992] A.J. No. 490, 1992 ABCA 144 (Alta. C.A.) — considered R. v. Krisza (2009), 2009 CarswellOnt 3024, [2009] O.J. No. 2205 (Ont. S.C.J.) — referred to R. v. Kutynec (1992), 12 C.R. (4th) 152, 70 C.C.C. (3d) 289, 7 O.R. (3d) 277, 52 O.A.C. 59, 8 C.R.R. (2d) 300, 1992 CarswellOnt 79, [1992] O.J. No. 347 (Ont. C.A.) — considered R. v. Legerton (2014), 2014 ABQB 162, 2014 CarswellAlta 758, [2014] A.J. No. 490, 583 A.R. 8 (Alta. Q.B.) — considered R. v. Loewen (1997), 1997 CarswellMan 633, 122 C.C.C. (3d) 198, [1998] 4 W.W.R. 425, 123 Man. R. (2d) 198, 159 W.A.C. 198, [1997] M.J. No. 649 (Man. C.A.) — distinguished R. v. Loveman (1992), 12 C.R. (4th) 167, 71 C.C.C. (3d) 123, 8 C.R.R. (2d) 294, 52 O.A.C. 94, 8 O.R. (3d) 51, 1992 CarswellOnt 80, [1992] O.J. No. 346 (Ont. C.A.) — followed 234 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

R. v. MacDougall (1998), 1998 CarswellPEI 87, 231 N.R. 147, [1998] S.C.J. No. 74, 19 C.R. (5th) 275, 128 C.C.C. (3d) 483, 165 D.L.R. (4th) 193, 168 Nfld. & P.E.I.R. 83, 517 A.P.R. 83, 56 C.R.R. (2d) 189, [1998] 3 S.C.R. 45, 1998 CarswellPEI 88 (S.C.C.) — considered R. v. MacIntosh (2011), 2011 NSCA 111, 2011 CarswellNS 843, [2011] N.S.J. No. 660, 983 A.P.R. 274, 310 N.S.R. (2d) 274, 281 C.C.C. (3d) 291, 250 C.R.R. (2d) 239, 359 D.L.R. (4th) 594 (N.S. C.A.) — referred to R. v. MacIntosh (2013), 2013 SCC 23, 2013 CarswellNS 244, 2013 CarswellNS 245, EYB 2013-221362, [2013] S.C.J. No. 23, 443 N.R. 32, 1042 A.P.R. 395, 329 N.S.R. (2d) 395, 296 C.C.C. (3d) 480, 359 D.L.R. (4th) 591, [2013] 2 S.C.R. 200 (S.C.C.) — referred to R. v. Mills (1986), [1986] 1 S.C.R. 863, (sub nom. Mills v. R.) 29 D.L.R. (4th) 161, (sub nom. Mills v. R.) 67 N.R. 241, 16 O.A.C. 81, (sub nom. Mills v. R.) 26 C.C.C. (3d) 481, 52 C.R. (3d) 1, (sub nom. Mills v. R.) 21 C.R.R. 76, (sub nom. Mills v. R.) 58 O.R. (2d) 544 (note), 1986 CarswellOnt 1716, 1986 CarswellOnt 116, [1986] S.C.J. No. 39, EYB 1986-67691 (S.C.C.) — followed R. v. Morin (1992), 12 C.R. (4th) 1, 71 C.C.C. (3d) 1, 134 N.R. 321, 8 C.R.R. (2d) 193, 53 O.A.C. 241, [1992] 1 S.C.R. 771, 1992 CarswellOnt 75, [1992] S.C.J. No. 25, 1992 CarswellOnt 984, EYB 1992-67508, [1992] A.C.S. No. 25 (S.C.C.) — followed R. v. Neil (2002), 2002 SCC 70, 2002 CarswellAlta 1301, 2002 CarswellAlta 1302, 168 C.C.C. (3d) 321, 6 Alta. L.R. (4th) 1, 6 C.R. (6th) 1, [2002] S.C.J. No. 72, (sub nom. Neil v. R.) 218 D.L.R. (4th) 671, [2003] 2 W.W.R. 591, 294 N.R. 201, 317 A.R. 73, 284 W.A.C. 73, [2002] 3 S.C.R. 631, REJB 2002-35135 (S.C.C.) — considered R. v. Panousis (2003), 2003 ABCA 294, 2003 CarswellAlta 1504, 112 C.R.R. (2d) 55, [2003] A.J. No. 34 (Alta. C.A.) — considered R. v. Purchase (2012), 2012 BCSC 208, 2012 CarswellBC 355, [2012] B.C.J. No. 269 (B.C. S.C.) — considered R. v. Rahey (1987), 75 N.R. 81, [1987] 1 S.C.R. 588, 39 D.L.R. (4th) 481, 78 N.S.R. (2d) 183, 33 C.C.C. (3d) 289, 57 C.R. (3d) 289, 33 C.R.R. 275, 193 A.P.R. 183, 1987 CarswellNS 340, 1987 CarswellNS 38, [1987] S.C.J. No. 23, EYB 1987-67384 (S.C.C.) — referred to R. v. Rivest (2013), 2013 YKTC 53, 2013 CarswellYukon 51, 296 C.R.R. (2d) 95 (Y.T. Terr. Ct.) — considered R. v. Saini (June 26, 2015), Doc. 111009148Q1 (Alta. Q.B.) — considered R. v. Sapara (2001), 2001 ABCA 59, 2001 CarswellAlta 253, [2001] 6 W.W.R. 459, 277 A.R. 357, 242 W.A.C. 357, 91 Alta. L.R. (3d) 28, 81 C.R.R. (2d) 356, [2001] A.J. No. 256 (Alta. C.A.) — considered R. v. Schiewe (1993), 79 C.C.C. (3d) 574, 135 A.R. 335, 33 W.A.C. 335, (sub nom. R. v. Schiewe) [1993] 1 S.C.R. 1134, 150 N.R. 303, 14 C.R.R. (2d) R. v. Warring 235

190, 1993 CarswellAlta 569, 1993 CarswellAlta 569F, [1993] S.C.J. No. 32, EYB 1993-66903, [1992] S.C.C.A. No. 299 (S.C.C.) — referred to R. v. Sharma (1992), 12 C.R. (4th) 45, 134 N.R. 368, 71 C.C.C. (3d) 184, 8 C.R.R. (2d) 222, 53 O.A.C. 288, [1992] 1 S.C.R. 814, 1992 CarswellOnt 76, 1992 CarswellOnt 985, EYB 1992-67511, [1992] S.C.J. No. 26 (S.C.C.) — considered R. v. Slaney (1992), 75 C.C.C. (3d) 385, 99 Nfld. & P.E.I.R. 141, 315 A.P.R. 141, 1992 CarswellNfld 254, [1992] N.J. No. 225 (Nfld. C.A.) — referred to R. v. Slaney (1993), 80 C.C.C. (3d) 383, 153 N.R. 153, [1993] 2 S.C.R. 228, 106 Nfld. & P.E.I.R. 137, 334 A.P.R. 137, 1993 CarswellNfld 222, 1993 Car- swellNfld 222F, EYB 1993-67356 (S.C.C.) — referred to R. v. Smith (1989), 73 C.R. (3d) 1, [1989] 2 S.C.R. 1120, 52 C.C.C. (3d) 97, 102 N.R. 205, 63 Man. R. (2d) 81, 45 C.R.R. 314, 1989 CarswellMan 13, 1989 CarswellMan 334, [1989] S.C.J. No. 119, EYB 1989-67172 (S.C.C.) — considered R. v. Steel (1995), 34 Alta. L.R. (3d) 440, 174 A.R. 254, 102 W.A.C. 254, 1995 CarswellAlta 456, [1995] A.J. No. 992 (Alta. C.A.) — referred to R. v. Tshitenge (2011), 2011 ABPC 117, 2011 CarswellAlta 527, [2011] A.J. No. 378 (Alta. Prov. Ct.) — considered R. v. Whitebear (2012), 270 C.R.R. (2d) 338, 550 A.R. 149, 2012 ABQB 626, 2012 CarswellAlta 2435, [2012] A.J. No. 1080 (Alta. Q.B.) — considered R. v. XYZ (2011), 2011 ABQB 95, 2011 CarswellAlta 282, [2011] A.J. No. 207, 228 C.R.R. (2d) 206, 506 A.R. 85 (Alta. Q.B.) — considered Statutes considered: 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. 8 — considered s. 9 — considered s. 10(b) — considered s. 11(b) — considered s. 24(2) — considered Controlled Drugs and Substances Act, S.C. 1996, c. 19 s. 5(1) — considered Criminal Code, R.S.C. 1985, c. C-46 Generally — referred to Narcotic Control Act, R.S.C. 1985, c. N-1 s. 19.2 [en. R.S.C. 1985, c. 42 (4th Supp.), Sched., s. 12] — considered

APPLICATION by accused for stay of proceedings.

Ken McDonald, for Crown Karen Molle, Kim Arial, for Accused, Gurpreet Singh Warring 236 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

M. David Gates J.: Introduction & Overview 1 This is an application brought by Gurpreet Singh Warring, (“the Ap- plicant”) seeking a remedy pursuant to s. 24(2) of the Canadian Charter of Rights and Freedoms (“the Charter”). The Applicant says that his right to be tried within a reasonable time, as guaranteed by s. 11(b) of the Charter, has been violated so as to warrant a judicial stay of proceedings. 2 For the reasons which follow, the application is dismissed.

History of the Proceedings 3 The Applicant was arrested and charged on June 21, 2011 with two counts of trafficking, contrary to s. 5(1) of the Controlled Drugs and Substances Act (CDSA), and two counts of possession of the proceeds of crime. He was released by a Justice of the Peace on the same date. His first court appearance was set for July 15, 2011. 4 On July 15, 2011, James Lutz went on record as counsel. Some dis- closure was provided to Mr. Lutz at that time and the matter was ad- journed for two weeks to July 29, 2011. A further two week adjournment to August 12, 2011, was granted in view of the fact that Mr. Lutz was away at the time. 5 A new information jointly charging the Applicant and Sandeep Saini (“Saini”), Amarjeet Singh Sandhu (“Sandhu”) and Abdullah Irshad (“Ir- shad”) was sworn on August 11, 2011, and was before the court on Au- gust 12, 2011. The Applicant was charged, together with Saini, Sandhu and Irshad, with one count of possession of heroin for the purposes of trafficking; possession of marihuana, in an amount exceeding three kilo- grams, for the purposes of trafficking; as well as possession of the pro- ceeds of crime. On the same information, the Applicant was separately charged with two counts of trafficking in heroin and three counts of pos- session of the proceeds of crime. Saini, Sandhu and Irshad were also charged with a number of counts of trafficking in heroin; possession of heroin for the purposes of trafficking; as well as possession of the pro- ceeds of crime. The Crown advised that this new information would need to be replaced and a further adjournment to September 8, 2011, was granted for that purpose. 6 A new, twenty-six, a count replacement information was sworn on August 26, 2011, separately charging the Applicant with the same five offences set forth in the August 11, 2011, information. He was also R. v. Warring M. David Gates J. 237

jointly charged with Saini, Sandhu and Irshad with possession of heroin for the purposes of trafficking, and possession of marihuana, in an amount not exceeding three kilograms, for the purposes of trafficking. This new information was before the court at the time of the September 8, 2011, court appearance. The Crown elected to proceed by indictment. Mr. Lutz, appearing for all four accused, advised the court that the re- placement information joining all four accused created a conflict for him and that an adjournment would be required for new counsel to be re- tained. The matter was, accordingly, adjourned for three weeks to Sep- tember 29, 2011. 7 On September 29, 2011, an agent for Patrick Fagan appeared and ad- vised that Mr. Fagan was going on record as counsel for the Applicant, Mr. Sandhu and Mr. Irshad. Mr. Lutz was formally removed as counsel at that time. Mr. Fagan’s agent indicated that he was still awaiting disclo- sure from either the Crown or former counsel. The agent indicated that an election of Judge Alone with a preliminary inquiry was proposed but asked to hold that in abeyance until the receipt and review of disclosure. The fourth accused, Mr. Saini, advised that he planned to retain Bran Popovic [sic] but had not yet done so. It was agreed that a three week adjournment to October 20, 2011, would be sufficient to enable the Crown to complete the redacting process. 8 Mr. St. Germain appeared on behalf of the Crown on both the Sep- tember 8 and September 29 court appearances. During the September 29th appearance, he made no mention of the fact that Mr. Lutz had ad- vised the court on the earlier date that he was unable to continue to re- present all four accused due to the new joint charge. 9 On October 20, 2011, Ms. Funk appeared on behalf of Mr. Fagan. Mr. Andre Ouellettte went on record as counsel for Mr. Saini. Mr. Ouel- lette entered an election of Provincial Court Judge on behalf of his client. Ms. Funk advised that she had no specific instructions regarding election. Mr. St. Germain again appeared on behalf of the Crown and confirmed that disclosure had been provided to counsel that same day. He advised that he was agreeable to a further adjournment. The matter was set over to November 1, 2011. 10 During the November 1, 2011, appearance, a further adjournment to November 25, 2011 was granted to sort out an issue regarding outstand- ing disclosure. Ms. Kaysi Fagan appeared on behalf of Mr. Fagan. Both she and Mr. Ouellette advised that disclosure was incomplete. The Crown advised that she understood substantial disclosure had been pro- 238 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

vided on October 20, 2011, and requested that counsel send a letter to the Crown identifying what disclosure was still missing. 11 On November 25, 2011, two packages of disclosure were provided to each defence counsel (Mr. Ouellette and Ms. Fagan on behalf of Mr. Fagan). An election of Provincial Court Judge was made by Mr. Ouel- lette on behalf of Mr. Saini, while Ms. Fagan entered an election of Judge and Jury with a preliminary inquiry on behalf of the Applicant and the two other co-accused. The matter was then adjourned to January 26, 2012, for the pre-preliminary inquiry meeting. The Crown noted that the “reasonable [sic] late date” for the pre-preliminary meeting was based on a defence request and that the Crown would have been ready on an ear- lier date. 12 When the matter was next in court on January 26, 2012, Ms. Fagan again appeared as agent on behalf of Mr. Fagan, as well as agent for Mr. Ouellette. At the request of Ms. Fagan, and the agreement of the Crown, the matter was adjourned to February 9, 2012. Ms. Fagan advised the court that: Today my instructions are to seek an adjournment. Originally when these charges were laid, they were laid on-they were laid separately and Mr. Fagan did not anticipate a conflict. Now it’s one Information and he’d like to — he would like to have some time to go through the file in order to determine if there is a conflict and the next steps from there. 13 Crown Counsel, Ms. Webber, appearing for the first time on the mat- ter, made no submissions regarding the history of the file, specifically that Mr. Lutz had withdrawn from the matter four months earlier on the basis of a conflict in representing all four accused. 14 On February 9, 2012, Ms. Fagan again appeared as agent for Mr. Fagan and Mr. Ouellette. She requested an adjournment for a few weeks, until March 1, 2012, to “point [the accused] in the right direction relative to new counsel.” 15 Ms. Fagan appeared again as agent for Mr. Fagan and Mr. Ouellette on March 1, 2012, and advised the court as follows: This matter has been kicking around 507 the PPM range, for the past few weeks. Originally, these four individuals were charged on four separate information, now they’re only charged on one. He’s spoken to the Crown and he’s reviewed the file and he’s determined that there is no conflict for the purpose of the prelim. So, now we’re back in a position where we can set a date for a pre-preliminary meeting. R. v. Warring M. David Gates J. 239

The court advised Ms. Fagan of a form that was required to be completed when one counsel intends to represent more than one co-accused. Ms. Fagan advised that she would bring this to Mr. Fagan’s attention and the matter was adjourned to March 8, 2012. 16 On March 8, 2012, a three-day preliminary inquiry was set for April 2-4, 2013, with the agreement of all counsel. Ms. Fagan again appeared as agent for both Mr. Fagan and Mr. Ouellette. The Crown had initially requested a block of four days for the preliminary inquiry, but requested three days when a four day block of time that was mutually agreeable to all counsel could not be found. 17 Appearing for the first time in person on April 2, 2013, Mr. Fagan advised the court that the Applicant, Irshad and Sandhu were consenting to committal on particular counts set out in the Information. In the case of the Applicant, he was committed to stand trial on counts 14, 15 and 16. Sandhu was committed to stand trial on counts 1 and 3, while Irshad was committed to stand trial on counts 19 and 21. Mr. Ouellette, appear- ing for Saini, also agreed to committal on counts 1,3,5,7, and 9. The re- maining counts in the information were withdrawn by the Crown. The matter was then adjourned to May 31, 2013, in the Court of Queen’s Bench. 18 A nine count indictment signed May 23, 2013, charged the Applicant with two counts of trafficking in heroin. Saini, Sandhu and Irshad were separately and jointly charged with trafficking in heroin in the remaining seven counts. 19 During the first appearance in Court of Queen’s Bench, Hughes J. raised the issue of possible conflict in Mr. Fagan representing more than one co-accused. Ms. Watts appearing as agent for Mr. Fagan advised: This is the situation, My Lady. My instructions are to seek an ad- journment for approximately three weeks in order for Mr. Fagan to have an opportunity to canvas the potential conflict with his clients. The adjournment I am seeking is a bit lengthy. I appreciate that. My understanding is that Mr. Fagan is getting married next week and needs a bit more time than might normally be required. The matter was adjourned for four weeks to June 28, 2013. 20 Mr. Hersh Wolch appeared for the Applicant on June 28, 2013, and advised that he had been retained as a result of Mr. Fagan’s conflict. Given that Mr. Fagan did not appear either in person or by agent, Mr. Wolch advised that he would appear on behalf of Mr. Fagan for his other clients. Mr. Ouellette appeared on behalf of Mr. Saini. Mr. Wolch re- 240 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

quested a three week adjournment until July 19, 2013, to familiarize him- self with the case. Hughes J. ordered Mr. Fagan to attend in person or by agent at the next appearance. 21 On July 19, 2013, Mr. Wolch appeared on behalf of the Applicant, Ms. Ferg appeared as agent for Mr. Fagan and sought leave for Mr. Fagan to get off the record relative to Messrs. Irshad and Sandhu. Mr. Colin Winter also appeared as agent for Mr. Sandhu and advised that he was in the process of being retained. Mr. Irshad appeared personally and advised the court that he planned to retain Ms. J. Blumer but had not yet done so. The matter was adjourned for two weeks to August 2, 2013, given that the matter was not in a position to be set for trial. 22 The matter was next spoken to on August 2, 2013. All four accused were represented by counsel at that appearance. The Crown advised that Ms. Blumer had received her disclosure only the day previous and that Mr. Winter was still awaiting disclosure. Mr. Winter proposed, and the Crown agreed, to a two week adjournment to September 20, 2013, to complete the disclosure process. 23 On September 19, 2013, the Applicant was taken into custody on a new charge of break, enter and theft. A further charge of robbery was added in November 2013. The Applicant was released from custody on September 27, 2013, following a show-cause and bail revocation hearing. The terms of his release included $10,000 cash bail; a surety in the amount of $10,000; a condition of house arrest save for employment pur- poses, and a requirement to remain within the Province of Alberta. 24 On September 20, 2013, the matter was set for trial for seven days commencing June 9, 2014. A pre-trial conference was booked for Janu- ary 24, 2014. In fixing the trial date, Ms. Blumer advised that her first availability for seven days was June 9, 2014. All other counsel confirmed their availability at that time. 25 A pre-trial conference was held before Hughes J. on January 24, 2014. There is no evidence before the court as to what transpired at the pre-trial, though Mr. Wolch advised the Court on October 16, 2015, that Hughes J. “much encouraged” that the matter be streamlined. Mr. Wolch advised the court at that time that the Applicant had been “compelled to go along” with the jury election and a trial set for two weeks, notwith- standing that he wished a judge alone trial that was anticipated to be rela- tively brief. 26 The matter was next in Criminal Appearance Court on May 23, 2014. Mr. Wolch appeared for the Applicant and all other accused were repre- R. v. Warring M. David Gates J. 241

sented by counsel. The Crown advised the court at that time that there were to be three replacements indictments place before the Court - one naming the Applicant alone; a second related to Messrs. Saini and Sandhu; and a third naming Mr. Irshad alone. While all indictments were believed to have been filed, only one was actually before the court. Pro- cess was transferred at this point from the joint indictment to the replace- ment indictments. 27 Mr. Wolch elected Judge Alone on behalf of his client and advised that one day only was required for the trial. He advised the Court that he was looking for a new trial date in the fall of 2014, and preferred not to proceed during the previously scheduled trial dates. He also advised of a possible resolution of the matter. The Crown did not oppose an adjourn- ment of the trial and the matter was set over to June 6, 2014, to deter- mine witness availability. 28 On May 26, 2014, the Crown signed a new indictment charging the Applicant with two counts of trafficking in heroin. On the same date, the Crown also signed a new indictment charging Irshad with two counts of trafficking in heroin. The next day, May 27, 2014, the Crown signed a further indictment charging Saini and Sandhu together, and in the case of Saini, individually with various counts of trafficking in heroin. 29 On June 6, 2014, Mr. Wolch sought a further two week adjournment until June 20, 2014, in order to determine which of the dates proposed by the Crown would be best. 30 A further adjournment of one week was sought by Mr. Gavin Wolch, on behalf of Mr. Hersch Wolch at the time of the June 20, 2014 court appearance. Mr. Wolch advised the court that there was some confusion regarding the respective calendars of Mr. H. Wolch and the Trial Coordi- nator. Process was transferred to the new indictment charging the Appli- cant alone and the Crown entered a stay of proceedings on the Q1 indict- ment relative to the Applicant. 31 At the June 27, 2014 appearance in Criminal Appearance Court, a two day trial set was set for March 11-12, 2015. 32 On May 15, 2015, the Provincial Crown entered a stay of proceedings in relation to the outstanding charges of robbery and break and enter. 33 The trial of this matter was heard on March 11-12, 2015. At the con- clusion of the evidence, the matter was adjourned to May 29, 2015, for decision. The Court ordered a transcript of the trial evidence and counsel were provided with a timetable for the filing of written submissions. 242 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

34 The completion of the trial transcript was delayed and counsel were unable to file their written submissions by the stipulated dates. On May 29, 2015, a new date of August 16, 2015 was set for decision. On that date, the Applicant was found guilty of two counts of trafficking cocaine to an undercover police officer. Mr. Wolch informed the Court at that time that he had recently learned that Nixon J. had stayed the charges against Messrs. Saini and Sandhu on June 25, 2015, having found a breach of their right to be tried within a reasonable time. 35 At the instance of the Court, the Applicant’s bail conditions were re- laxed with regard to his regular reporting requirements. Defence counsel sought a pre-sentence report and the sentencing hearing was set for Octo- ber 16, 2015, to allow for the completion of the report. 36 On October 9, 2015, the Applicant filed and served the Crown with a Charter Notice alleging a breach of his s. 11(b) right to be tried within a reasonable time. 37 On October 16, 2015, Mr. Wolch advised the Court that the Applicant had retained Ms. Karen Molle to bring the Charter application and to complete any sentencing matters that might be required, depending upon the outcome of the Charter application. The matter was then adjourned to November 13, 2015 in Criminal Appearance Court, at which time a hearing date of January 27, 2016, was fixed.

The Law 38 Section 11(b) of the Charter provides that: 11. Any person charged with an offence has the right (b) to be tried within a reasonable time. 39 In R. v. Morin, [1992] 1 S.C.R. 771 (S.C.C.), the Court identified (at paras. 26-28) the purpose of s. 11(b): The primary purpose of s. 11(b) is the protection of the individual rights of accused. A secondary interest of society as a whole has, however, been recognized by this court. .... The individual rights which the section seeks to protect are: (1) the right to security of the person, (2) the right to liberty, and (3) the right to a fair trial. The right to security of the person is protected in s. 11(b) by seeking to minimize the anxiety, concern and stigma of exposure to criminal proceedings. The right to liberty is protected by seeking to minimize exposure to the restrictions on liberty which result from pre-trial in- carceration and restrictive bail conditions. The right to a fair trial is R. v. Warring M. David Gates J. 243

protected by attempting to ensure that proceedings take place while evidence is available and fresh. 40 The interest of society was described by the Court as encompassing society’s interest in seeing that accused are treated humanely and fairly. Public confidence is enhanced by prompt trials. At the same time, the Court recognized that some accused have no interest in a speedy trial and that in such instances the interests of society will diverge from those of an accused. The Court went on to discuss the societal interest in seeing those who break the law brought to justice. At para. 30, Sopinka J. stated: There is, as well, a societal interest that is by its very nature adverse to the interests of the accused. In Conway, a majority of this court recognized that the interests of the accused must be balanced by the interests of society in law enforcement. This theme was picked up in Askov in the reasons of Cory J. who referred to “a collective interest in ensuring that those who transgress the law are brought to trial and dealt with according to the law.” (pp. 1219-1220 [S.C.R.]). As the seriousness of the offence increases so does the societal demand that the Accused be brought to trial. The role of this interest is most evi- dent and its influence most apparent when it is sought to absolve per- sons accused of serious crime simply to clean up the docket. 41 The majority in Morin pointed out that there is no formula to be ap- plied in determining whether or not the right to be tried within a reasona- ble time has been breached. Rather, a court is required to balance “the interests which the section is designed to protect against factors which either inevitably lead to delay or are otherwise the cause of delay” (para.31). 42 The factors to be considered are: 1. The length of the delay; 2. Waiver of any time periods; 3. The reasons for the delay, including (a) inherent time requirements of the case, (b) actions of the accused, (c) actions of the Crown, (d) limits on institutional resources, and (e) other reasons for delay; and 244 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

4. Prejudice to the accused. 43 The Supreme Court subsequently dealt with the proper interpretation of s. 11(b) in R. v. Godin, 2009 SCC 26 (S.C.C.), and a number of other decisions. The guiding principles articulated by the Supreme Court in R. v. Conway, [1989] 1 S.C.R. 1659 (S.C.C.); R. v. Askov, [1990] 2 S.C.R. 1199 (S.C.C.), Morin, Godin and other decisions have been applied in countless trial and appellate court decisions in Canada, too numerous to mention.

The Length of the Delay 44 The period to be examined in this process is the date of the charge to the end of the trial, including sentencing. Periods that have been waived are to be subtracted, leaving a period of time that is to be assessed to determine whether or not it is unreasonable. In this instance, the Appli- cant was arrested on June 21, 2011. His trial took place in Calgary on March 11-12, 2015. A date for his sentencing hearing was set for Octo- ber 16, 2015, at which time the sentencing was adjourned to allow the Charter argument to be heard. The Applicant filed his Charter Notice on October 9, 2015. The total length of delay from the date of charge to the scheduled date of sentencing is 52 months.

Waiver 45 In Morin, the Court indicated that allegations of waiver on the part of an accused should be addressed before moving to a more detailed consid- eration of the reasons for delay. The Court stated as follows (at paras. 37- 39): If by agreement or other conduct the accused has waived in whole or in part his or her right to complain of the delay then this will either dispose of the matter or allow the period waived to be deducted. This court has clearly stated that in order for an accused to waive his or her rights under s. 11(b), such waiver must be clear and unequivo- cal, with full knowledge of the rights the procedure was enacted to protect and of the effect that waiver will have on those rights... Waiver can be explicit or implicit. If the waiver is said to be implicit, the conduct of the accused must comply with the stringent test for waiver set out above. .... Waiver requires advertence to the act of release rather than mere in- advertence. If the mind of the accused or his counsel is not turned to the issue of waiver and is not aware of what his or her conduct signi- fies, then this conduct does not constitute waiver. Such conduct may R. v. Warring M. David Gates J. 245

be taken into account under the factor “actions of the accused” but it is not waiver. As I stated in Smith, supra, which was adopted in As- kov, supra, consent to a trial date can give rise to an inference of waiver. This will not be so if consent to a date amounts to mere ac- quiescence in the inevitable. 46 In R. v. Smith (1989), 52 C.C.C. (3d) 97 (S.C.C.), the Court held that agreement to a future trial date will, in most circumstances, amount to waiver. At p. 109, the Court held: Agreement by an accused to a future date will in most circumstances give rise to an inference that the accused waived his right to subse- quently allege that an unreasonable delay has occurred. While silence cannot constitute waiver, agreeing to a future date for a trial or a preliminary inquiry would generally be characterized as more than silence. Therefore, absent other factors, waiver of the appellants s. 11(b) rights might be inferred based on the foregoing circumstances. 47 In a subsequent decision, R. c. Brassard, [1993] 4 S.C.R. 287 (S.C.C.), L’Heureux-Dube stated, at para. 2, “In the absence of any evi- dence that these consents amount to acquiescence in the inevitable, the consents constituted waiver or, as actions of the accused attributable to him.” See also R. v. Rahey, [1987] 1 S.C.R. 588 (S.C.C.); R. v. Slaney (1992), 75 C.C.C. (3d) 385 (Nfld. C.A.), aff’d [1993] 2 S.C.R. 228 (S.C.C.); R. v. Bennett (1991), 64 C.C.C. (3d) 449 (Ont. C.A.) aff’d (1992), 74 C.C.C. (3d) 384 (S.C.C.); R. v. Heikel, 1992 ABCA 142 (Alta. C.A.) at para. 27. 48 In R. v. Adam, 2006 BCSC 350 (B.C. S.C.), Romilly J discussed the impact of defense counsel’s agreement to trial dates in the 11(b) context: [133] It matters not whether defence counsel’s agreement for later trial dates amounts to waiver, actions of the accused or simply an indication of an absence of prejudice; whichever it may be, the agree- ment stops the running of the clock against the breach of the ac- cused’s constitutional rights to be tried within a reasonable period of time. Accommodating the needs of defence counsel counts against the defence when calculating delay under s. 11(b): see Allen; and R. v. Chatwell (1998), 38 O.R. (3d) 32 (C.A.), aff’d [1998] 1 S.C.R. 1207. [134] In R. v. MacPherson (1999), 127 B.C.A.C. 49, 1999 BCCA 403 (B.C. C.A.), the Court held that the Crown was not solely re- sponsible for the delay created even though the rescheduling was made necessary by the Crown’s failure to disclose a police officer’s notes in a timely manner. Similarly, the Crown is not responsible for delays created due to defence counsel’s calendar: R. v. Kwok (2002), 246 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

164 C.C.C. (3d) 182 (B.C. C.A.) at 189, 2002 BCCA 177 (B.C. C.A.). 49 Romilly J went on to determine whether consent to adjournments amounted to waiver by the accused of the resulting delay. He concluded that the consent to adjournment by defense counsel amounted to waiver rather than mere acquiescence. There was “absolutely no evidence” of acquiescence when defense counsel consulted his calendar and agreed to the proposed dates. 50 The requirement that defense counsel produce evidence of acquies- cence was discussed by Fraser CJA in R. v. Koruz, 1992 ABCA 144 (Alta. C.A.), affirmed [1993] 1 S.C.R. 1134 (S.C.C.), at para. 56: As for the suggestion that an agreement to dates should be treated as nothing more than an agreement to the inevitable, I reject this posi- tion. First, there is absolutely no evidence that this was so. Second, the practice of Crown counsel in Alberta pre-Askov to consult with defence counsel on mutually convenient trial dates points to a con- trary conclusion. What would have been the purpose of taking the time to discuss dates if in the final result, the Crown was simply go- ing to dictate that the first available date be chosen? There would have been none. 51 This position was affirmed more recently by the Alberta Court of Ap- peal in R. v. Sapara, 2001 ABCA 59 (Alta. C.A.) at para. 28, and by Yamauchi J in R. v. Legerton, 2014 ABQB 162 (Alta. Q.B.) at paras. 49- 51. 52 I am satisfied that, absent evidence to the contrary, agreement be- tween counsel to suggested dates should not be characterized as mere “acquiescence to the inevitable.” If there is no evidence to establish counsel’s agreement to dates was in fact acquiescence, the delay stem- ming from the agreement to the dates will amount to waiver by the ac- cused in the Morin analysis.

The Reasons for the Delay (a) Inherent time requirements of the case 53 Inherent time requirements recognize that some delay is inevitable. They cover the period required to prepare and process a case assuming the availability of adequate institutional resources. The inherent time re- quirements of a case are neutral in the s. 11(b) reasonableness assessment and do not count against the Crown or the accused. Any delay attributa- ble to inherent time requirements is deducted from the overall period of R. v. Warring M. David Gates J. 247

delay: R. v. MacDougall, [1998] 3 S.C.R. 45 (S.C.C.) at para 44; Rahey, at para. 31, Conway, at para. 37; Morin, at para. 37; Koruz, at para. 45; Legerton, at paras.86-87. 54 These time requirements include intake procedures - for example, bail applications, retention of counsel and disclosure, and recognize that greater time is required if the case is complex or if the proceedings in- clude both a preliminary inquiry and a trial. This element also takes into consideration that counsel work on more than one file at a time and are not expected to devote all of their efforts to a particular matter. 55 In Morin, the Court specifically declined to set an administrative guideline for this intake period given regional variations. No administra- tive guidelines have been established by the Alberta Court of Appeal or, indeed, directly addressed by any other court in Alberta. However, in Koruz, Fraser J A (as she then was), at para. 47, expressed reluctance to fix guidelines in the absence of statistical data regarding the issue of in- herent or systemic delay.

(b) Actions of the Crown 56 As the Court in Askov stated, at para. 40: “it is the duty of the Crown to bring the accused to trial.” The actions of the Crown may, however, also delay the trial. Even in the absence of fault or blameworthiness, the Crown cannot rely on its own actions or inactions to justify a delay that is otherwise unreasonable. In Morin, the Court cited Crown disclosure decisions, change of venue applications and adjournments requested by the Crown as illustrative of the types of Crown actions contemplated by this factor. See also: R. v. MacIntosh, 2011 NSCA 111 (N.S. C.A.), aff’d 2013 SCC 23 (S.C.C.); R. v. Beason (1983), 7 C.C.C. (3d) 20 (Ont. C.A.) 57 The purpose of s. 11(b) is not, however, to assign blame to either party, but rather to determine whether the period of delay in prosecuting an accused is unreasonable. It is not concerned with misconduct and should not be used as a means to punish the prosecution or the police. As stated by the Ontario Court of Appeal in R. v. Geene, 2009 ONCA 329 (Ont. C.A.), at para. 67, “[t]he focus of the exercise under s. 11(b), how- ever, is on the impact of the delay on the accused and society, not on weighing the seriousness of the causes of the delay or attaching blame”. 58 In Morin, in discussing delay caused by the conduct of the Crown, Sopinka J. stated at para. 46: As with the conduct of the accused this factor does not serve to as- sign blame. The factor simply serves as a means whereby actions of 248 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

the Crown which delay the trial may be investigated. Such actions include adjournments requested by the Crown, failure or delay in dis- closure, change of venue motions, etc .... [S]uch delays cannot be relied upon the Crown to explain away delay that is otherwise unreasonable. 59 While Sopinka J. states that a “failure or delay in disclosure” cannot be used to justify a delay, he does not state that this is egregious conduct that should be punished or made blameworthy. It is a factor that may make the delay unreasonable but such conduct by the police or prosecu- tion should not be punished by granting a stay under s. 11(b). 60 This same idea was expressed by the majority in Conway, at para. 22: The Crown is free to use its prosecutorial discretion as it seems fit, provided that it does not conduct the prosecution in an abusive man- ner. We are not here concerned with fault but with the reasonableness of the over-all delays in bringing an accused to justice. 61 The comments made by the majority in Conway reflect the comments made by Lamer J. (as he then was) three years earlier writing for three members of a seven person court (the majority decision did not address the issue) in R. v. Mills, [1986] 1 S.C.R. 863 (S.C.C.) at paras. 190-191: The purpose of s. 11(b), however, is not to penalize or sanction mis- conduct by the authorities. The section is concerned not with abuse of process but with abusive process. The Crown’s motives, whatever they may be, do not render a reasonable delay unreasonable nor can they transform an unreasonable delay into a reasonable lapse of time. Thus, whether the delay is the result of malice, negligence or inad- vertence is of little import, the remedy being in all cases at least a stay, except, of course, when considering additional remedies, such as damages. With respect, whether governmental delay is deliberate or not is irrel- evant to the determination of the violation. Indeed, the right may be violated, in some circumstances, despite the best intentions and best efforts of the authorities. The function of the doctrine of abuse of process is, therefore, in my view entirely distinct from that of s. 11(b). While a reduction in official misconduct may be a conse- quence of s. 11(b), this is not its purpose. In the eyes of the indivi- dual accused, it matters little whether the delay is imputable to the authorities or not; what truly matters is the extent to which the delay will impair his or her interests. Section 11(b) does not to any extent represent an entrenchment or an extension of the common law doc- trine of abuse of process. R. v. Warring M. David Gates J. 249

62 Finally, in applying the factors set out in Morin, supra, I am guided by Fraser, J.A.. writing for the majority in Koruz, at para. 32: What the court must assess is the reasonableness of the over-all de- lays in bringing an accused to justice: Conway, supra, at p. 307. This task is not, and should not be permitted to become, an exercise in assigning fault for each and every step in the trial process.

(c) Actions of the accused 63 Actions of the accused falling short of waiver must nonetheless be taken into account in deciding whether the delay is unreasonable. In con- sidering the actions of the accused in this context, the objective is not to attribute blame or fault. Rather the purpose is to understand how the ac- tions of the accused, including the strategic decisions of defence counsel, contribute to the overall delay. In Morin, the Court cited change of venue applications, attacks on wiretap evidence and defence requests for ad- journments as examples of the type of actions contemplated by this fac- tor. See also Askov, at paras. 95-96.

(d) Limits on institutional resources 64 Inadequate resources may cause institutional or systemic delay. This delay begins when the parties are ready for trial but the system cannot facilitate a trial date. Systemic delay is delay to be attributed to the Crown in the absence of justification, whereas inherent time require- ments are a neutral factor. 65 In Morin, the Court suggested 8-10 months as a guide to provincial courts and 6-8 month after committal for trial as a guideline in assessing reasonable institutional or systemic delay. Similar guidelines had previ- ously been set by the Court in Askov. However, the Court in Morin also indicated that regionally based guidelines relative to this type of delay were best left to provincial courts of appeal. These guidelines do not serve, in effect, as a limitation period to be applied in a mechanical fash- ion. In these types of applications, the court must consider all of the fac- tors in determining whether or not a Charter breach has been established. 66 In Godin, the Court considered a period of 21 months from the date the charges were instituted until the completion of the preliminary in- quiry. However, Cromwell J observed, at para. 5, that notwithstanding that this period exceeded the Morin guideline “[t]hat on its own does not make the delay unreasonable.” 250 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

67 As discussed above, the Alberta Court of Appeal has never provided specific regional guidelines on permissible periods of systemic or institu- tional delay. The cases in Alberta tend to adopt the same time period as that stated in Askov. However, in Koruz, a case decided after Askov but prior to Morin, the Alberta Court of Appeal held that an approximately eleven month delay from arraignment to the first scheduled six week trial date was not an unjustifiable systemic delay. The Court of Appeal sig- naled caution in setting a guideline. The Court also referred to the problems in assessing an appropriate number because of the dangers in drawing conclusions from statistical data: Koruz, at paras. 47-50. 68 More recently, in R. v. Tshitenge, 2011 ABPC 117 (Alta. Prov. Ct.), the Alberta Provincial Court stated “In the normal course, based on the time requirements of a full day trial and the resources available in this jurisdiction, it takes 9 to 10 months to obtain a trial date in this jurisdic- tion” (at para. 9). This case would seem to suggest that there is at least some authority in Alberta for roughly following the actual guidelines set forth in Askov and Morin. 69 It is, in my view, significant to note that both Askov and Morin were primarily, if not entirely, concerned with institutional or systemic delay. In Morin, the sole source of delay was limits on institutional resources. In Askov, the Supreme Court was entirely concerned with systemic delay. The Court in Morin stated (at para. 48): There is a point at which the court will no longer tolerate delay based on the plea of inadequate resources. This period may be referred to as an administrative guideline. I hasten to add that this guideline is neither a limitation period nor a fixed ceiling on delay. 70 The authorities recognize that there is distinction between the inher- ent time requirement of a case and systemic or institutional delay. Any time that elapses in the judicial system is not systemic delay. If it were, then the inherent time requirements of a case would be fully subsumed in systemic delay. The Morin guideline of 14 to 18 months for institutional or systemic delay does not, in my view, incorporate the inherent time requirements of the intake stage of the process.

(e) Other reasons for delay 71 In deciding a s. 11(b) application, the Court is required to consider or take into account all of the reasons for the delay. This category encom- passes other reasons for delay that do not fit into the other four catego- ries. As more fully described below, I would include under this category R. v. Warring M. David Gates J. 251

any delay occasions by the situation of conflict that arose for defence counsel in conjunction with the Crown’s decision to join the Applicant on an indictment naming three other individuals.

Prejudice to the Accused 72 Prejudice suffered by an accused is a factor necessary to justify a ju- dicial stay by virtue of an unreasonable delay of a trial. This factor re- lates to the prejudice to the accused suffered as a result of the unreasona- ble delay and not just prejudice suffered because of the criminal proceedings themselves. 73 Prejudice to an accused may arise from an inability to make full an- swer and defence because of the delay’s impact on evidence and wit- nesses testimony, prejudice to an accused’s liberty interest in terms of pre-trial custody or bail conditions, and prejudice to an accused’s secur- ity of the person, “in the sense of being free from the stress and cloud of suspicion that accompanies a criminal charge”: Godin, at paras. 30-31. 74 In Morin, the Court stated (at para. 61): ...in an individual case, prejudice may be inferred from the length of the delay. The longer the delay the more likely that such an inference will be drawn. In circumstances in which prejudice is not inferred and is not otherwise proved, the basis for the enforcement of the indi- vidual right is seriously undermined. 75 Later, at para. 62, the Court also stated: This right must be interpreted in a manner which recognizes the abuse which may be invoked by some accused. The purpose of s. 11(b) is to expedite trials and minimize prejudice and not to avoid trial on the merits. Action or non-action by the accused which is in- consistent with a desire for a speedy trial is something that the court must consider. 76 The extent to which Morin makes prejudice a key factor in a. s. 11(b) analysis is clear when the ruling is considered in its entirety. The Su- preme Court accepted that there was a 14 2 month delay, that the accused did not waive any period of delay, that the Crown and the Accused were not at fault for any of the delay, and that 12 months of institutional delay could be inferred because the inherent time requirements of the case was only 2 months. Even though the institutional delay was greater than the 8 to 10 month guideline just accepted, the Supreme Court held that there was no Charter violation. The determining factor in Morin seems to have been that the delay could be accepted because the accused had not 252 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

proven any prejudice. In Morin, the Court also noted that the accused failed to lead evidence of actual prejudice and, indeed, failed to respond to a letter from the Crown inquiring whether he wished to have his case expedited because of anticipated prejudice (at para. 78). In the result, the Court held that the accused was content with the pace with which things were proceeding and that therefore there was little or no prejudice occa- sioned by the delay (at para. 78). 77 Subsequently in Godin, the Court cautioned that the question of prejudice cannot be considered separately from the length of the delay. Godin also accepted that prejudice may be inferred from the length of the delay and that direct evidence is not always required. The inferred prejudice may be in the form of the charges hanging over the accused’s head, restrictive bail conditions, or impairment of ability to cross-ex- amine witness testimony. An appreciation of the potential risk of prejudice, as well as any actual prejudice, is necessary in determining if a delay is unreasonable.

Balancing of the Factors 78 All of the Morin factors are to be considered by the Court in deter- mining if an accused’s s. 11(b) Charter right has been violated. In Morin, Sopinka J. explained, at para. 32, that: The judicial process referred to as “balancing” requires an examina- tion of the length of the delay and its evaluation in light of the other factors... It must then be determined whether this period is unreason- able having regard to the interests s. 11(b) seeks to protect, the expla- nation for the delay and the prejudice to the accused. 79 However, the analysis must not proceed in a mechanical manner and the Court must not focus on only certain periods of delay or only on prejudice. As stated by the Court in MacDougall, at para. 41, “the ulti- mate question for determination is the reasonableness of the overall delay”. 80 This balancing exercise was done by the majority in R. v. Sharma, [1992] 1 S.C.R. 814 (S.C.C.), a companion case to Morin, at para. 33: Applying the factors discussed above, particularly the actions of the accused, the paucity of prejudice and the guideline concerning insti- tutional delay and taking into account the interests designed to be protected, particularly the relative seriousness of the charge, I con- clude that the delay herein was not unreasonable. R. v. Warring M. David Gates J. 253

81 Accordingly, the finding of a delay or the finding of prejudice against an accused is not enough. There must be a balancing of the prejudice suffered by the accused, the societal interest, and the explanation of the delay.

Analysis 1) Timing of the Application 82 The position of the Crown is that the Applicant has waived the entire period from the date of the institution of the proceedings to the date he filed his Charter application, a total of fifty one and one half (51.5) months, or four years, three months and seventeen days. The Crown says that the Applicant was represented by very experienced counsel through- out and at no time did he provide any indication that he was concerned about the amount of time taken to complete his trial. Rather, the Crown says he waited fifty eight days following his conviction to bring his con- cerns relative to a speedy trial to the attention of the Court and the Crown. Finally, the Crown says the trial delay only became an issue for the Applicant once his trial defence had failed and he had been convicted. 83 The position of the Defence is that it remained open to the Applicant to seek a remedy for an alleged breach of his s. 11(b) Charter right up until the conclusion of the sentencing process. The Defence says that it would be inconsistent with the existence of such a continuing right to find that the Applicant somehow waived the entire period as a result of the delay in initiating this application. 84 Morin contemplated that an accused could be found by his conduct to have waived his entire right to complain of delay. While the vast major- ity of the cases that interpret and apply s. 11(b) address waiver in the context of portions of the overall delay, it seems clear that it is open to a court to find waiver of the entire period. As more fully set out below, I am satisfied that the Applicant waived at least thirty one months of the delay through his agreement to the dates set for the preliminary inquiry and the trial.

2) Notice Requirement - Criminal Proceeding Rules 85 Section 12 of the Court of Queen’s Bench Criminal Proceeding Rules (“the Rules”) governs the notice requirements for an application seeking Charter relief. The provision requires that a Charter application must be served on the parties and the court seven days prior to the pre-trial con- 254 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

ference or sixty (60) days before trial, whichever is earlier. The Appli- cant clearly did not comply with this requirement. 86 The Rules do not, however, discuss what occurs when an accused fails to serve a Charter application in accordance with this requirement. Further, subsection 1(3) states that the Rules do not limit the jurisdiction or authority of the Court unless otherwise expressly provided. 87 The Court of Appeal in R. v. Dwernychuk, 1992 ABCA 316 (Alta. C.A.), leave to appeal refused [1993] S.C.C.A. No. 30 (S.C.C.), held, at para. 29, that Charter filing guidelines “are not intended to be treated as inflexible rules” and that the “trial judge should exercise his or her dis- cretion in the interests of justice.” The Ontario Court of Appeal came to a similar conclusion in R. v. Loveman (1992), 8 O.R. (3d) 51 (Ont. C.A.), holding that “where a Charter right is at stake, a trial judge will be reluc- tant to foreclose an inquiry into an alleged violation.” It is, however, im- portant to point out that the court in that instance was dealing with a situation where there was no statutory requirement or rule in place re- quiring the provision of advance notice of an intention to raise a Charter argument at trial. The decision in Loveman was released simultaneously with the Court’s decision in R. v. Kutynec (1992), 7 O.R. (3d) 277 (Ont. C.A.). 88 In R. v. Henry, 2004 ABQB 440 (Alta. Q.B.), Martin J. held that the Provincial Court trial judge erred in law in concluding that he lacked jurisdiction to entertain a Charter application in the absence of proper notice in accordance with the Rules. Martin J. explained that even with- out notice, the court retains the discretion to permit such applications to proceed with the Crown’s consent or to adjourn the trial so that proper notice can be given. She relied on both Dwernychuk and Loveman. 89 In R. v. XYZ, 2011 ABQB 95 (Alta. Q.B.), Yamauchi J., citing Dwernychuk, Loveman, and Henry, permitted an accused to advance an argument alleging a breach of s. 9 of the Charter in circumstances where no prior notice had been filed. Of note, however, Yamauchi J. explained that the s. 9 argument was necessary to “set the stage” for arguments regarding alleged violations of sections 8 and 10(b), for which prior no- tice was given. 90 Based on these authorities, I conclude that the failure to comply with the notice requirement in the Rules is not a bar, as urged upon me by the Crown, to the court entertaining a Charter argument. However, I am sat- isfied that it is a matter that is properly considered in examining the tim- R. v. Warring M. David Gates J. 255

ing of this application. As such, I am mindful of the words of Doherty J.A. in Loveman, at p. 55: A trial judge must control the trial proceedings so as to ensure fair- ness to all concerned and preserve the integrity of the trial process. The specific situations in which the trial judge must exercise that power are infinitely variable and his or her order must be tailored to the particular circumstances. In the exercise of this inherent power, a trial judge may decline to entertain a motion where no notice, or in- adequate notice, of the motion has been given to the other side. This must be so even when the motion involves an application to exclude evidence pursuant to s. 24(2) of the Charter. Clearly, where a Char- ter right is at stake, a trial judge will be reluctant to foreclose an inquiry into an alleged violation. There will, however, be circum- stances where no less severe order will prevent unfairness and main- tain the integrity of the process. 91 In describing the factors to be taken into consideration, Doherty J.A. indicated, at p. 55, that, amongst other things, “the trial judge had to be concerned with the effective use of court resources and the expeditious determination of criminal matters.” 92 The Applicant relies on the decision of the Manitoba Court of Appeal in R. v. Loewen (1997), 122 C.C.C. (3d) 198 (Man. C.A.), for the pro- position that an unreasonable delay allegation may be raised at the con- clusion of the trial following verdict but prior to sentencing. In my view, the decision in Loewen must be approached with caution given its unu- sual circumstances. 93 Loewen and others were jointly charged with two counts of money laundering, contrary to s. 19.2 of the Narcotic Control Act. Five days prior to the start of the trial, Loewen alone served notice of his intention to bring a Charter application alleging unreasonable delay. The trial judge declined to hear the application and directed that the trial proceed. She found that there was non-compliance with the Queen’s Bench Rules and that the Crown had insufficient time to prepare for the application. On appeal to the Manitoba Court of Appeal, the court allowed the appeal and remitted the matter back to the Court of Queen’s Bench for a deter- mination of the Charter application on the merits. 94 At p. 206, a majority of the Court held: Ideally, an Askov application should be made to the trial judge well in advance of the scheduled trial. The early hearing of the application will allow reserve time for the decision, if required, and will also allow valuable trial time to be used efficiently in the event of a deci- 256 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

sion in the accused’s favour. That is precisely why the Queen’s Bench Rules require notice of pending Charter applications at the first possible opportunity and preferably at the pre-trial conference, prior to trial dates being set. However, the Rules are not rigid and must remain capable of dealing with issues as they arise. 95 Referring to the decisions in Dwernychuk, Loveman and Kutynec, the Court concluded that this was not the proper case for the trial judge to have declined to hear the accused’s Charter application, notwithstanding the failure to give proper notice. As such, the Court concluded, at para. 18, that “procedural requirements must give way to constitutional rights”. 96 The Applicant places great weight on a number of obiter passages in the majority decision of Helper J.A. that discuss possible options that would have been available to the trial judge to accommodate the As- kov application without unduly disrupting the trial. One of the arguments advanced by the Crown before the Trial Judge was that an adjournment of the trial would have been required given the Crown’s intention to ex- amine defence counsel relative to his participation at various pre-trial conferences, thereby forcing him to withdraw from the case. On appeal, the Crown sought to uphold the trial decision on a number of bases, in- cluding the fact that the trial had been scheduled for some period of time; various witnesses had been subpoenaed and were set to testify; a full hearing would be required to consider the Askov application; and an ad- journment of the trial would adversely impact the court’s ability to effec- tively manage its trial schedule. It was in this context that Helper J.A. suggested (at p. 206): In this case, an adjournment of the commencement of the trial may not have been the only means available to the trial judge to deal with the Askov application. Upon Crown counsel’s request for time to pre- pare for the application and to present his submission, she could have decided to proceed with the trial and hear the Askov application at a convenient time during the course of, or at the conclusion of, the trial. 97 Continuing at p. 207, Helper J.A. stated: I am not advocating such a practice in all cases, and I am not sug- gesting this alternative method of proceeding is ideal. Far from it for the obvious reason that, if the application succeeds, a trial may not be required. Additionally, in the case of a jury trial, a different approach to the late notice of an Askov application may have to be taken. Fi- nally, in all cases, justice must not only be done, but must be seen to R. v. Warring M. David Gates J. 257

be done. Reasonable notice of Askov applications is recommended by the jurisprudence and required by the Rules. Notice operates in the best interests of all concerned for the management of trial sched- ules and the hearing of appeals. This, however, was not the ordinary case, and this was not an ordinary delay. (emphasis added) 98 In separate, concurring, reasons, Kroft J.A. underscored the unique nature of the situation then before the Court. At p. 210, he stated: When exceptions to the timely notice policy are made, the trial judge will have to respond by making pragmatic adjustments to the pre- ferred and proper procedure. They may be in the form of an adjourn- ment or a reorganization of a previously planned trial schedule. Such changes may be inconvenient to counsel and to witnesses, may be costly and may result in even further delay. The refusal to make them does not, though, justify a denial of justice. Helper J.A. has suggested that a postponement of the hearing until after the completion of the trial might have been a solution in this case. Although she may be right, I do not know enough about the circumstances pertaining to prior representations by counsel, the availability of witnesses or the contemplated trial schedule to react to this suggestion. Postponement of the hearing of an application to stay until after the trial may be an option to be considered but to me, it seems to be the least desirable choice. As was pointed out by my colleague, a post-trial hearing is not likely to work where the trial is one before a jury. Even where the trial is to be before a judge alone, it will leave unresolved many of the schedul- ing problems and, more importantly, may leave an air of suspicion surrounding the ultimate hearing. If the entire case is presented to the court before the Askov application is presented, there could easily be a perception that the proceeding is unfair. Let it be understood, though, that my comments here are an expression of concern and not a rejection of the suggestion that the hearing of an application might, in rare situations, follow the trial. 99 The facts in Loewen were very different from those in the matter now before me. As noted by the Court of Appeal, this was the only identified case at the time in which a trial judge had refused to entertain a Charter application brought by an accused. In the current matter, counsel have not referred me to any other cases involving similar facts that have arisen since Loewen. It is for this reason that I approach the decision with cau- tion and reject the Applicant’s reliance on the decision in this instance. In my view the key fact in Loewen was that the trial judge refused to hear 258 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

the accused’s Charter application brought before the start of the trial. It was the denial of even the opportunity to make the Charter argument that prompted the intervention of the Court of Appeal and led the Court to suggest that postponing the trial or, alternatively, the hearing of the ap- plication may have been better options than refusing to hear the applica- tion altogether. In my view, the Court of Appeal’s decision was a prag- matic response to a highly unusual fact situation. I do not read Loewen as standing for the proposition that an accused may wait until the conclu- sion of his or her trial to raise for the first time that the trial did not take place within a reasonable time. To the extent that the Applicant’s argu- ment is based on such an interpretation of Loewen, I respectfully reject such a contention. 100 There is no suggestion in this instance that post-conviction delay is an issue in the sense that the Applicant is complaining of a long delay from the date of conviction to the completion of the sentencing process. There is clearly authority for the proposition that post-conviction delay, either in conjunction with pre-trial delay or as stand-alone delay, can give rise to a breach of s. 11(b). See: R. v. Rahey, [1987] 1 S.C.R. 588 (S.C.C.); R. v. Gallant, [1998] 3 S.C.R. 80 (S.C.C.); R. v. Bosley (1992), 18 C.R. (4th) 347 (Ont. C.A.). 101 In my view, the timing of this application is highly problematic. In R. v. D. (C.), 2014 ABCA 392 (Alta. C.A.), the Court of Appeal dealt with another instance where the accused sought a Charter remedy for an al- leged breach of s. 11(b) after trial and conviction, but just prior to sen- tencing. At para. 3, the Court observed: Unusually, the motion was not filed until well after conviction and trial, but before sentencing was to occur. The affidavit in support was filed only the morning of the scheduled sentencing, and the motion was argued that day. However, written and oral argument before us said little about that timing, and counsel felt that they had not fully researched the law on that topic. The trial judge did not base himself on that ground, nor discuss the topic. We will therefore not look on that as a possible procedural impediment to the defence motion. 102 In the absence of full argument on the point, I am not prepared to conclude that the Applicant’s impediment is purely procedural. Rather, I would conclude that, under all of the circumstances, the Applicant has waived the entire time period and is thereby precluded from now com- plaining about delay. R. v. Warring M. David Gates J. 259

103 The onus of proof in relation to alleged breaches of the Charter clearly rests with the accused person. As such, there is a clear require- ment for an accused to serve timely notice of his allegations in this re- gard. It is not, in my view, open to an accused to await the outcome of his trial and, if unsuccessful in the defence advanced, raise for the first time following conviction that his right to trial within a reasonable time has been breached. 104 It seems likely that the timing of the application was motivated by two factors: (a) the finding of guilt on August 16, 2015; and (b) the decision of Nixon J in R. v. Saini (June 26, 2015), Doc. 111009148Q1 (Alta. Q.B.) [hereinafter Saini and Sandhu]. 105 The related charges against the Applicant’s former co-accused Saini and Sandhu were stayed by Nixon J on June 26, 2015, on the basis of a finding of a breach of s. 11(b) of the Charter. As with the case against the Applicant, the alleged trafficking offences relative to Saini and Sandhu took place in 2011. Nixon J found that a total of forty eight (48) months and three (3) days elapsed between the date of arrest and the scheduled completion date of the trial. Both Saini and Sandhu brought their s. 11(b) applications at the commencement of the trial, prior to the calling of evidence. In the case of Saini, he served his Charter notice on the Crown and the Court on September 29, 2014, thereby manifesting his discontent with the pace at which his matters were proceeding to trial long before the actual commencement of the trial. A copy of Sandhu’s Charter Notice, assuming one was filed, was not located on the court file. 106 While much of the factual background to the Saini and Sandhu matter is obviously identical to that of the Applicant, I note that Nixon J. re- ferred to the fact that the Crown in Saini/Sandhu conceded that there was no waiver of any time period by the accused persons and, moreover, that six hundred and thirty four (634) days were properly characterized as institutional delay. This is a very different scenario to the one currently before the court. Nixon J. also described the case as “a simple case” (at p. 100, l. 22) and that the Crown increased the complexity of the case by adding the Applicant and Irshad to the September 8, 2011 information, only to revert to the original formulation of the charges as against Saini and Sandhu in the indictment of May 27, 2014. With great respect, I am unable to agree with Nixon J.’s characterization of this case as “simple” given its history. 260 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

107 While I appreciate that the Applicant may well question the different outcome in his case from those of his former co-accused Saini and Sandhu, this does not create an entitlement to similar or identical treat- ment. The differences between the two situations are, in my view, very significant, most particularly as regards the timing of the application, but also as regards the s. 11(b) analysis. In the result, I place little weight on this decision. 108 Given the unique circumstances of this case, I am satisfied that this is the type of rare situation contemplated in Morin where an accused can be found to have waived the entire period of the alleged delay. The Appli- cant was represented by senior, experienced criminal defence counsel throughout the process. Every adjournment was either initiated or con- sented to by counsel. The date selected for the preliminary inquiry and the first trial was, likewise, the subject of agreement between counsel. The second trial date came about as a result of a request for the Appli- cant’s counsel for an adjournment. The actions of the Applicant through- out were inconsistent with a desire for an expeditious trial: R. v. Steel (1995), 174 A.R. 254 (Alta. C.A.). His concerns relative to delay only became sufficiently serious as to warrant this application for Charter re- lief after his defence was rejected and he was found guilty of the charges. I would, accordingly, dismiss his application on this basis. 109 If I am wrong in concluding that the Applicant waived the entire pe- riod of the complained delay, I go on to consider the matter in accor- dance with the Morin factors. As such, the timing of this application falls to be considered in conjunction with the actions of the accused, prejudice, and the overall balancing of the various factors.

Length of Delay 110 The period of time to be reviewed is, as previously stated, approxi- mately 52 months. In my view, this length of time is sufficient to raise an issue as to its reasonableness.

Waiver 111 I am satisfied that the Applicant waived three period of time for a total of 32 months. These period are: a) March 8, 2012 to April 4, 2013 (13 months) - The preliminary inquiry was set in Provincial Court on March 8, 2012. Based on the transcript of proceedings from that date, there is nothing on the record to suggest that this was anything other than waiver. Specif- R. v. Warring M. David Gates J. 261

ically, this was a date selected by counsel as being mutually agree- able. In the absence of some evidence that this date was merely acquiescence to the inevitable, I am satisfied that the agreement of the Applicant’s counsel to this date amounted to waiver. b) September 20, 2013 - June 19, 2014 (9 months) - The first trial date was set in Criminal Appearance court on September 20, 2013. Ms. Blumer, counsel for Irshad advised the court that her first availability for a seven day block of time was June 9, 2014. All counsel agreed to this date. There is no evidence that the Ap- plicant was not in agreement with this date. I am satisfied that this period was also waived by the Applicant. c) June 19, 2014 - March 11, 2015 (9 months) - The first trial date was adjourned as a result of a series of events, including the lay- ing of a new separate indictment relative to the Applicant and the fact that Mr. Wolch elected trial by Judge Alone and advised that the matter could be completed in one day. At Mr. Wolch’s re- quest, the trial was adjourned to a new date, ultimately determined to be March 11-12, 2015. In view of the fact that this new trial date was specifically requested by the Defence, I find that this pe- riod of time was waived by the Applicant. 112 Taking into consideration the periods of time that were waived by the Applicant, I find that the period of delay to be assessed in this instance is 21.5 months.

3) The Reasons for the Delay i) Inherent Time Requirements of the Case 113 The focus of the consideration of delay in this instance must obvi- ously include an examination of the total overall delay, 52 months. 114 Given my findings of waiver of the three time periods, described above, I turn to consider the remaining blocks of time and, in particular, the conflict issues relative to the period prior to March 8, 2012. I would define these blocks of time as follows: a) Date of arrest to fix date for the preliminary inquiry - 8.5 months (June 21, 2011 - March 8, 2012) b) Date of committal for trial to fix date for first trial date - 5.5 months (April 2, 2013-September 20, 2013) 262 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

c) Date of conviction to date of sentencing - 8.5 months (August 16, 2015 - April 29, 2016) 115 Dealing with the second period - date of committal for trial to the fix date for the first trial date, I would characterize this 5.5 month period as partly the inherent time requirements of the case and partly delay occa- sioned as a result of the actions of the Applicant. 116 The period from the date of committal, April 2, 2013 to the first ap- pearance in the Court of Queen’s Bench, May 31, 2013, a period of two months, was clearly part of the inherent time requirements of the case. During this time the file was transferred from Provincial Court to the Court of Queen’s Bench and the Crown filed the indictment. The next four-week period, until June 28, 2013, is properly characterized as delay attributable to the actions of the Applicant. Part of the reasons for the adjournment was the fact that Mr. Fagan was away getting married. An- other reason for the delay was to allow Mr. Fagan to respond to the in- quiry of Hughes J. on May 31, 2013, regarding his potential conflict in representing multiple, jointly charged accused. 117 The remaining 2.5 months that makes up this particular block of time is, in my view, properly attributed to the inherent time requirements of the case. During this time period, Mr. Fagan withdrew from the case and was replaced by three new counsel, including Mr. Wolch for the Appli- cant. The process of retaining new counsel, ensuring that Crown disclo- sure was provided to the new counsel, and allowing for a period of time for new counsel to familiarize themselves with the Crown’s case was obviously required given the withdrawal of Mr. Fagan. Given that this was taking place over the summer months and involved three new coun- sel, I am satisfied that the time required to complete this process was reasonable under all of the circumstances. 118 Dealing with the third period, from the date of conviction to the date of sentencing, I would break this period into four parts: a) Conclusion of trial evidence to date of Conviction - 5 months March 12, 2015 - August 16, 2016 b) Date of Conviction to date set for sentencing - 2 months August 16, 2015 - October 16, 2015 c) Date set for sentencing to conclusion of s. 11(b) application - 5 months October 16, 2015 - March 21, 2016 R. v. Warring M. David Gates J. 263

d) Conclusion of s. 11(b) application to sentencing - 1 month March 21, 2016 - April 20, 2016 119 I would characterize the first five-month block of time, from the con- clusion of the trial evidence to the date of conviction, as part of the inher- ent time requirements of the case. The first portion, until May 29, 2015, was required to obtain a transcript of the evidence and to allow counsel to prepare written submissions. Time was obviously required to allow for the preparation of the transcript and for counsel to prepare their written submissions. The trial, while not lengthy, involved moderately complex issues relating to eyewitness identification and the use of photo-line ups. The defence called evidence, including evidence from the Applicant de- nying his involvement in either transaction. The scheduling of the date for the trial decision obviously had to take into account the schedules of the Court and both counsel. Ultimately, the date of May 29, 2015, had to be changed due to the late receipt of the transcript and the inability of the parties to complete their written submissions within the timeframes pre- viously specified. The matter was, accordingly, set over to August 16, 2015, for decision. 120 I am satisfied that the second part of this five-month period, until Au- gust 16, 2015, the date of conviction, was also part of the inherent time requirements of the case. An adjournment was required when the trial transcript was not completed as quickly as anticipated. The transcript was necessary to permit counsel to prepare their written submissions. The resulting delay was not lengthy and spanned a portion of the tradi- tional summer holidays. Again, the scheduling of the new date for the trial decision had to take into account the schedules of the Court and both counsel. 121 There was a further two month delay following conviction to allow for the preparation of a pre-sentence report requested by the Applicant’s trial counsel. The date of October 16, 2016, was fixed for this hearing. I would characterize this two month period as delay attributable to the ac- tions of the Applicant. 122 The five month delay that followed, from October 16, 2015 to March 21, 2016, was occasioned by the Applicant’s filing of his Charter appli- cation on October 9, 2015. This period of time involved the ordering and review of transcripts of the thirty court appearances related to this matter and the preparation of written briefs by both the Crown and the Defence. At the conclusion of the hearing on January 27, 2016, judgment was re- served until March 21, 2016, at which time the Charter application was 264 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

dismissed and a sentencing date was set for April 20, 2016. In my view, this five month delay arose as a result of the actions of the Applicant. 123 The first block of time, from the date of the arrest to the fix date for the preliminary inquiry, July 21, 2011, to March 8, 2012, requires more detailed analysis in view of the Applicant’s contention that the Crown was responsible for much of this delay as a result of its failure to take action on the issue of the defence conflict. While the conflict issue is more fully discussed below, I am satisfied that at least a portion of this initial eight and one half months is properly attributed to intake require- ments and, as such, part of the inherent time requirements of the case. 124 Unfortunately, there is no evidence before me on the normal intake periods for matters in the Provincial Court of Alberta in this or any other region of the province. Likewise, there are no guidelines from the Court of Appeal relative to the inherent time requirements for criminal cases in this province. In the absence of any such guidelines, I assess the time spent on the intake requirements in the context of the specific circum- stances and requirements of this case. 125 First, unlike Morin, which involved a charge of impaired driving, this case was not ready for trial once all of the witnesses had been inter- viewed and their statements transcribed and disclosed to defence counsel. Suspected drug samples were obtained through the two alleged under- cover drug transactions involving the Applicant, as well as the trafficking and possession for the purposes charges against the Applicant and the other accused with whom he was initially charged. These samples were sent to Health Canada for analysis. This was an important part of the investigation, both to the Crown as well as to the Applicant. It added to the overall complexity of the case so as to justify a greater period of time to complete this part of the process. 126 Second, the requirement for drug analysis, together with the fact that a preliminary inquiry was required, thus necessitating a two-stage trial process, added a degree of complexity to this matter that was absent in Morin. In assessing the overall complexity of the case, I focus primarily on the circumstances that existed at the time, i.e. the Applicant and three others were jointly charged on a twenty six count information alleged nine separate incidents of trafficking heroin, one count of possession of heroin for the purposes of trafficking, one count of possession of mari- huana (of an amount not exceeding three kilograms), and thirteen counts of possession of the proceeds of crime. The preliminary inquiry was scheduled for three days. R. v. Warring M. David Gates J. 265

127 The Applicant concedes that a number of the short adjournments that occurred during this stage are properly characterized as being part of the inherent time requirements of the case. As such, this time was required for standard intake processes, including the provision of disclosure. However, as of the September 29, 2011 appearance, the Applicant says that all of the delay from this point forward until March 8, 2012, a period of approximately five and one half months, was occasioned by the Crown’s failure to properly address the defence conflict in representing all of the then jointly charged accused. Specifically, the Defence says that as of September 8, 2011, the Crown was aware that one counsel representing all four accused was in a untenable position yet took no steps to resolve the matter. 128 Even assuming that there was a duty on the Crown to bring the con- flict issue forward for resolution by the court, a subject more fully dis- cussed below, the Applicant’s written brief is entirely silent on the de- gree of responsibility resting on the Applicant and/or his then counsel to deal with this issue. As such, the Applicant seeks to place on the Crown the entire responsibility on the Crown for addressing an issue that was fundamentally related to the solicitor-client relationship that existed be- tween the Applicant and his then counsel. For the reasons that follow, I am unable to accept the Applicant’s premise that this was a duty and/or responsibility that rested on the Crown alone. 129 In conclusion, approximately 14 months of the 22.5 month delay were the result of the inherent requirements of the case.

ii) Actions of the Crown Crown’s alleged failure to raise the conflict issue 130 There is no real dispute between the parties that some delay was oc- casioned as a result of the fact that both Messrs. Lutz and Fagan had to withdraw from the legal representation of the Applicant on account of conflict of interest. The Applicant argues that while the duty to raise is- sues of conflict, generally, is shared by the Crown, the Defense and the Court, in this instance the Crown is responsible for this entire period due to its failure to address the conflict from September 2011, through May 2013. 131 The Applicant states that the Crown was aware of the conflict throughout this period yet failed to act. The Crown agrees with this gen- eral proposition, but says that there is no duty on the Crown to resolve them. Further, the Crown states that in this case there was no need for the 266 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Crown to raise the conflict issue as it was raised early in the proceedings by Mr. Lutz and eventually dealt with by Mr. Fagan. 132 Conflict is a serious concern that arises when there is a “substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client, a former client, or a third person”: R. v. Neil, 2002 SCC 70 (S.C.C.) at para. 31. Avoiding conflict is a core component of the duty of loyalty, which is owed to a client by his lawyer by virtue of the solicitor-client relationship: Neil, at para. 16. 133 In R. v. Con-Drain Co. (1983) Ltd., [2008] O.J. No. 1012 (Ont. C.J.), the Court found (at para. 20) that there is an obligation on both Crown and defense counsel to raise an issue of conflict at “the earliest practica- ble stage,” (See also Neil at para. 38.) The law requires both parties to be alert and to avoid conflict issues, and that there is an onus on the Crown and defense to identify and resolve any conflict. 134 The Ontario Court of Appeal in R. v. Atkinson (1991), 5 O.R. (3d) 301, 68 C.C.C. (3d) 109 (Ont. C.A.), held that the trial judge had erred in attributing delay flowing from conflict entirely to the Crown. There were conflict issues in that case between defense counsel and a Crown wit- ness, and the trial judge attributed the delay in resolving the conflict to the Crown. The Court of Appeal overturned that aspect of the decision because defense counsel had known about the conflict issue for the same period of time as the Crown, but had denied the conflict while continuing to act. The Court of Appeal concluded that “the delay caused by coun- sel’s conflict position was wrongly viewed as delay attributable to the Crown and given weight it did not deserve.” (see para. 89). 135 Other decisions have categorized delays attributable to conflict as in- herent or neutral time requirements, or as attributable to the party that has the actual conflict: see R. v. Beauchamp, [2008] O.J. No. 5315 (Ont. S.C.J.) and R. v. Krisza, [2009] O.J. No. 2205 (Ont. S.C.J.). In the related case of Saini and Sandhu, Nixon J. also considered this same issue and concluded that this was delay occasioned by the actions of the Fagan law firm and, as such, attributable to the defence. 136 Graesser J. considered this issue in R. v. Whitebear, 2012 ABQB 626 (Alta. Q.B.). He concluded that the Court is also obliged to recognize and deal with conflicts in criminal matters, as they may result in the disquali- fication of counsel for the accused, Crown counsel, or the trial judge. Graesser J. also reviewed the difficult issue of conflict in the context of multiple representations; (at paras 114-117). R. v. Warring M. David Gates J. 267

137 In fleshing out the contents of a shared obligation to raise conflict, Graesser J. stated as follows at para.124: It is not up to the Crown or the Court to monitor defence counsel’s potential conflicts. Records are not (to my knowledge) kept on what clients defence counsel are acting for or who they have acted for in the past. No records are kept linking defence counsel to witnesses. If such records were kept, there would likely be serious privacy issues, and the prospect of that appears to be somewhat “Big Brother”-like. Defence counsel’s strategies cannot be permitted to sabotage the in- terests of justice and the individual fair trial interests of each accused person who finds him or herself in the criminal justice system. Nor should convenient disposition of matters where one counsel under- takes multiple representation influence the Crown with respect to its duties. 138 The Applicant relies on the decision of Greckol J. in R. v. Caines, 2011 ABQB 82 (Alta. Q.B.), in which she dismissed an application for a stay of proceedings based on unreasonable delay. Part of the alleged de- lay was said to flow from one of the defence counsel’s conflict of interest in that he not only represented two of the accused, but also extended to current and former representation of witnesses as well as unindicted co- conspirators. At paras. 366 and 371, Greckol J. found that the Crown had a duty to complain about this conflict earlier in the proceedings and, as such, shared with defence counsel the responsibility for the resulting de- lay. At para. 371, she stated: The Crown, however, shares this responsibility. The Crown was in possession of all of the relevant facts involving Mr. Chadi’s multiple concurrent and successive representational roles. Indeed, because the facts that underlay the charges against the unindicted co-conspirators also will form part of the Crown’s case in the Koker prosecutions, I must conclude that the Crown had full knowledge of the various rep- resentations undertaken by Mr. Chadi when he became counsel of record in the various related matters (with the exception of Gregoire). These matters should have been raised by the Crown for determina- tion by a judge long before the conflicts required Mr. Chadi to withdraw. 139 Ultimately, she concluded the responsibility to raise the issue of pos- sible conflict is a shared obligation and attributed at least some of the delay to “Crown delay” and “Other reasons for the delay”. She also char- acterized as delay attributable to the accused the delay occasioned by the need for new counsel to come on the file prior to trial. 268 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

140 An appeal to the Alberta Court of Appeal on the s. 11(b) ruling was dismissed in R. v. Alcantara, 2015 ABCA 259 (Alta. C.A.). However, the Court of Appeal’s decision casts some doubt on the attribution to the Crown of responsibility for the delay associated with the defence conflict issue. At para. 324, and then paras. 330-332, 334, the Court held: 324. We have trouble seeing why Mr. Chadi’s conflict helps the ac- cused on the s. 11(b) delay. Did the Crown have a duty to complain sooner? The trial judge said yes (paras 366, 371). Aside from saying that the Crown had full knowledge, she does not seem to explain why the Crown had that duty. 330. It may be thought that here we are committing the error of look- ing for blame, contrary to the Morin case, supra. But blame is not our point. Morin says that the issue is who caused the relevant delay (para 39, 41). The conflict has nothing to do with the Crown, who, in no way caused it. If the Crown had no duty to complain or explain, then the Crown had no causative role in any aspect of the conflict. If an acquaintances car catches fire and one does nothing through one happens to see the fire, one had not caused the fire or its consequences. 331. The idea of splitting “responsibility” for (and delay from) Mr. Chadi’s conflicts of interest is somewhat odd, and probably unwork- able. If it were a matter of blame, then maybe one could handle that task by using percentages and splitting up fractions of the delay. 332. But as noted, the leading Supreme Court of Canada decision rejects blame as a relevant factor: see R. v. Morin (paras 39-41 (NR)). Instead Morin says that the question is which party caused the delay. There the Supreme Court of Canada says that other defence Charter motions are not blameworthy; the accused has every right to bring them. But the time which they add must be deducted from the total delay whose length s 11(b) restricts/caps (para 39). Is there not a parallel here in the difficult decisions which two of the three accused (including Mr. Knapczyk) made to retain Mr. Chadi? They had a right to counsel of their choice, but in the end their choice consumed time and extended the total time... 334. That conclusion is reinforced by the fact that the Crown’s postu- lated responsibility in the conflict area was purely curative. The Crown had (and could have) no part in creating the conflict, nor hav- ing anyone hire Mr. Chadi, nor agree or not agree to waive the conflict. 141 I agree with Graesser J.’s determination that the Crown is not re- quired to monitor potential conflicts among defense counsel. As set out R. v. Warring M. David Gates J. 269

in Neil, the duty to avoid conflicts is an essential aspect of the duty of loyalty owed by a lawyer to his client. While it may be true that opposing counsel and the Court itself ought to raise a conflict issue if one arises, the ultimate duty lies with the lawyer whose responsibility is to his client and his client’s interests. It would be inconsistent with the basic tenets of fiduciary duty and the lawyer-client relationship to determine that oppos- ing counsel - in this case, the Crown - owes the same responsibility to raise conflict as the lawyer for an accused. Further, Mr. Warring was represented by experienced defense counsel throughout the period where he is now alleging conflict caused delay. It is completely reasonable to expect and require experienced lawyers to resolve any conflict issues without the help of the Crown or the Court. 142 In this instance, the possible conflict was well-known to all concerned virtually from the outset of the proceedings, and certainly as soon as Sep- tember 8, 2011, when Mr. Lutz made it known that he could no longer act for all four accused once they were all joined on a single information. Thereafter, various agents appearing on behalf of Mr. Fagan reported to the Court that he was considering the conflict issue. 143 It is also clear on the evidence before me that the Applicant, himself, was aware that the reason Mr. Lutz felt compelled to withdraw from his early representation of all of the co-accused related to a potential conflict of interest. When cross-examined on his affidavit filed in support of this application, the Applicant conceded that Mr. Lutz told him that there was a conflict and that he was aware of the problem when he hired Mr. Fagan to represent him. I do not accept his evidence that he never discussed the conflict issue with Mr. Fagan or that he had no knowledge that Mr. Fagan was also representing Sandhu and Irsahd until attending court on the date set for the commencement of the preliminary inquiry. 144 There is no evidence before me as to any communication that took place between Messrs. Lutz and Fagan once the latter assumed conduct of the defence of the Applicant, together with Saini and Sandhu. How- ever, it seems reasonable to infer that some communication must have taken place, specifically as regards the conflict issue that prompted Mr. Lutz to withdraw. 145 There is also no evidence before me regarding the nature and extent of communication between Mr. Fagan and the Crown once he assumed conduct of the file. Unfortunately, Mr. Fagan did not attend a single docket appearance relative to this matter. His sole appearance in Provin- cial Court took place on April 2, 2012, the opening day of the prelimi- 270 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

nary inquiry. There is, accordingly, no record of any discussion or dia- logue between Mr. Fagan and the Crown and the court relative to the conflict issue. 146 I would pause to point out that the practice of having an agent attend docket appearances, while understandable given the court and other com- mitments of busy defence counsel, has the unfortunate effect of creating missed opportunities for direct dialogue between counsel and, indeed, between counsel and the court. The information provided to the court at the various docket appearances relative to Mr. Fagan’s review of the con- flict issue was cursory at best. The unfortunate result was that the issue was left unresolved for a number of months while the Court, and possi- bly the Crown, awaited the results of Mr. Fagan’s consideration of the matter. 147 Mr. Fagan’s agent first raised the conflict issue with the court at the time of the January 26, 2012, appearance. At that time, the Court was advised, somewhat surprisingly in my view, that Mr. Fagan had not an- ticipated a conflict given that the accused were initially charged separ- ately. The agent asked for a further period of time for Mr. Fagan to re- view the file to determine if there was a conflict. At the next appearance on February 9, 2012, Mr. Fagan’s agent requested a further adjournment until March 1, 2012, so as to allow the accused to retain new counsel. At the time of the March 1st appearance, Mr. Fagan’s agent advised the court that Mr. Fagan had reviewed the file, spoken to the Crown, and determined that there was no conflict for the purposes of the preliminary inquiry. At this same appearance, the Court advised of the requirement to complete a form in situations where one counsel intends to represent more than one co-accused. At the next appearance on March 8, 2012, the preliminary inquiry was set for three days commencing April 2, 2013. 148 While the Applicant strenuously argues that the Crown was under some obligation to take steps to ensure that the conflict issue was brought to the attention of the court, I am satisfied that the identification of a potential conflict issue was, indeed, brought to the court’s attention as early as August 29, 2011 by Mr. Lutz, and then again by Mr. Fagan’s agent at the time of the court appearances starting on January 26, 2012. As previously indicated, it was certainly known to the Applicant and his counsel. 149 The position of the Applicant would seem to be that the obligation on the Crown to raise the conflict issue with the court also included the obli- gation to take appropriate steps to resolve the matter. I am not prepared R. v. Warring M. David Gates J. 271

to come to such a conclusion on the evidence before me in this application. 150 Mr. Fagan was, in my view, entitled to a reasonable opportunity to review the disclosure materials and make a determination as to whether or not he believed that he was in a position of conflict in representing the Applicant and two of his co-accused. Ultimately, it seems clear that he completed such a review and came to the conclusion that there was no conflict, at least as regards the preliminary inquiry. As previously indi- cated, the preliminary inquiry did not proceed and there was a consent committal to nine charges of trafficking alleged to involve the Applicant and his then co-accused. At the same time, the Crown discontinued pro- ceedings on seventeen other charges. Subsequently, at the request of Hughes J on May 31, 2013, Mr. Fagan again reviewed the issue of con- flict and subsequently, on July 19, 2013, applied to withdraw from the case. 151 I am satisfied that any delay that arose as a result of Mr. Fagan’s conflict was delay caused by the actions of the accused. As previously indicated, I do not accept the Applicant’s contention that this delay is attributable to the Crown and its failure to take steps to resolve the con- flict issue. As explained by the Court of Appeal in Alcantara, the delay was not caused by the Crown, but rather by the actions of the Applicant and his then counsel. 152 To conclude the issue of conflict, I agree with the Crown that any duty to raise the conflict issue that may have rested on the Crown does not equate to a finding that, for the purposes of a s. 11(b) analysis, the Crown caused any resulting delay. The Crown is not required to resolve issues between defense counsel and his client and can in no way be said to have caused any delay flowing from defence conflict issues. This is not, however, to say that the Crown may not, in appropriate circum- stances, have a duty to bring the existence of a defence conflict to the attention of the Court for resolution. This is not, however, the issue to be addressed in this s. 11(b) application.

The Characterization for s. 11(b) Purposes of the Period - June 21, 2011 to March 8, 2012 153 At least a portion of the 8 month period from the date of arrest to the set date for the preliminary inquiry can fairly be attributed to intake re- quirements that are part of the inherent time requirements of the case. For example, from the record it appears clear that disclosure was not 272 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

completed until November 25th. While there is no evidence before me as to the extent of disclosure involved in this matter, five months seems to me to be a reasonable period of time given the number of accused, the nature of the charges involved in the case, and the fact that at least some of the disclosure was transferred from Mr. Lutz to Mr. Fagan. 154 The intake requirements of this case also involved the Crown’s deci- sion to lay replacement informations to the information originally sworn by the police at the time of the Applicant’s arrest. As previously noted, the intake time also necessitated a change of counsel. I would simply add that the intervention of the summer months is a factor to be considered given that the availability of the Court and counsel is somewhat more limited during the summer than during other times of the year. Under all of the circumstances, I am satisfied that the period of from the date of arrest to the completion of the disclosure process, November 25, 2011, a total of 5 months, can properly be attributed to the intake requirements of the case. 155 That leaves the period between November 25, 2011 and March 8, 2012, a total of 15 weeks to be assessed. As outlined above, I am satis- fied that this delay is properly attributed to the actions of the Applicant and his then counsel in that it was delay occasioned by the conflict issue then facing Mr. Fagan.

The Crown’s Change in Prosecution Strategy 156 The Applicant relies on the decision of the Yukon Territorial Court in R. v. Rivest, 2013 YKTC 53 (Y.T. Terr. Ct.), in suggesting that the shift- ing prosecution strategy of the Crown led to delay in this case. In that instance, the Information was amended and re-sworn on several occa- sions. The Crown altered its prosecution strategy with each change, re- sulting in a significant delay of the trial and prompting the accused to bring an Askov application. 157 While the Court in Rivest found that the delay due to change in prose- cution strategy weighed heavily against the Crown, it did not find that this factor was determinative. At para 20, the Court held: “I am not satis- fied that this alone is sufficient to elevate this to ‘the clearest of cases’ justifying a stay of proceedings.” Rather, the Court concluded, it is but one factor to consider in the overall balance under Morin. Regarding the multiple replacement Informations, the Court stated, at para 54: “While it is clearly open to the Crown to correct deficiencies in charges, its re- peated failure to get things right is troubling, and, in this case, its scram- R. v. Warring M. David Gates J. 273

bling on the eve of trial unnecessarily prejudiced the accused and led to the first adjournment.” A second adjournment due to missed filing dead- lines also created delay attributable to the Crown which, together with the shifting prosecution strategy, was found to have caused unreasonable delay. 158 Delay occasioned by prosecutorial strategy was also addressed by the British Columbia Court of Appeal in R. v. Ghavami, 2010 BCCA 126 (B.C. C.A.). The Court confirmed that, short of a claim for abuse of pro- cess, the Crown is free to determine how it will prosecute its cases. A similar conclusion was reached by the Alberta Court of Appeal in R. v. Panousis, 2003 ABCA 294 (Alta. C.A.). The Court in Panousis found that the Crown is in no way compelled to explain its procedural choices. Rather, as the Court pointed out at para 5, “[reviewing] the record will inform whether or not the delays in a particular case were reasonable and whether or not the Crown properly exercised its discretion not to sever when the case was before the Provincial Court.” The Court found that the trial judge erred in principle in focusing on the Crown’s strategy rather than considering the laying of charges as just one of several factors rele- vant to an assessment of the overall delay. 159 It is clear that the prosecution strategy in this instance changed over the course of time. As previously indicated, there were three different informations placed before the court and, relative to the Applicant, two different indictments. 160 The transcript from the August 12, 2011, appearance reveals that the police swore the initial information charging the Applicant and his co- accused on separate informations. At the instance of the Crown, once it assumed carriage of the matter, two new informations were sworn join- ing all of the accused, including the Applicant, in a single information. This process took place over a period of approximately three weeks and involved no significant delay in moving the matters forward. 161 There was nothing improper in the Crown’s initial decision to join all of the accused in a single information. If nothing else, joining all of the related charged reduced the number of potential trials and, as such, the number of occasions that Crown witnesses would be required to testify. The amount of court time required to deal with the matters was, accord- ingly, reduced. 162 It is clear from the transcript of the April 2, 2013, court appearance that the parties reached an agreement prior to the start of the preliminary inquiry leading to a consent committal on the various trafficking counts 274 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

set out in the information. This agreement led to a clear shift in the pros- ecution strategy in moving the matter forward. Again, I see nothing im- proper in the decision reached by the parties to streamline the case by reducing the number of charges required to proceed to trial. No delay was occasioned as a result of this particular change in the prosecution strategy. 163 The final change in the prosecution strategy took place when the Crown filed new indictments on May 26 and 26, 2014, charging each of the Applicant and Irshad on separate indictments and joining Saini and Sandhu on a separate indictment. At that point, the Applicant elected trial by Judge Alone and Mr. Wolch advised the Court that the trial would only require one day. The Crown’s new indictments followed the pre- trial conference before Hughes J. in which she encouraged the parties to streamline the matter. 164 I am not satisfied that the various changes in the prosecution strategy described above actually led to any delay in getting this matter to trial. Indeed, which the Applicant refers to the evolving Crown strategy over the life of this matter, he does not actually attribute any specific delay to this factor. In the result, I am not satisfied that this is a serious issue in this case. 165 In conclusion, I am unable to accept the Applicant’s various argu- ments that the action of the Crown contributed to delay in this instance.

iii) Actions of the Applicant 166 Actions of the Applicant falling short of waiver can be considered in assessing the total period of delay. I am, however, mindful of the words of Lamer J. (as he then was) in Mills, and Sopinka J. in Morin, that the purpose of s. 11(b) is not to assign blame or to punish the prosecution or the police. 167 As outlined above, I am satisfied that the trial was delayed a total of approximately 9 months as a result of the actions of the Accused as follows: a) November 25, 2011 - March 8, 2012 (15 weeks) b) May 31, 2012 - June 28, 2013 (4 weeks) c) October 16, 2015 - March 21, 2016 (5 months) 168 I would deduct this approximately 9 month period from the total de- lay requiring explanation by the Crown. R. v. Warring M. David Gates J. 275

iv) Limits on Institutional Resources 169 The position of the Crown is that 697 days of the delay are to be attributed to institutional delay in the event that the Court finds the Ap- plicant did not waive the entire time period. The Crown suggests that there are three periods of time involving institutional delay: a) November 25, 2011 - January 26, 2012 (62 days) - adjournment to permit Mr. Fagan to consider the issue of potential conflict; b) March 8, 2012 - April 2, 2013 (390 days) - set date for the prelim- inary inquiry to completion of the completion of the preliminary inquiry; c) September 20, 2013 - May 23, 2014 (245 days) - set date for first trial to date Mr. Wolch sought and obtained an adjournment of Applicant’s trial. 170 The position of the Defence is that none of the delay is attributable to institutional delay. I agree. For the reasons previously stated, I am of the view that the second and third periods described as institutional delay by the Crown were period waived by the Applicant. With respect to the first period, as previously indicated, I am of the view that this period is a portion of the delay arising from the time required to address Mr. Fagan’s conflict issue and, as such, falls to be assessed as part of the delay occasioned by the actions of the Applicant. I do not agree with the Crown’s suggestion that any of these periods should be characterized as institutional delay.

v) Other Reasons for the Delay 171 Neither party has cited any other reasons for the delay in bringing this matter to trial.

vi) Prejudice 172 As discussed above, prejudice may be inferred from a delay because of the charges hanging over the accused’s head, restrictive bail condi- tions, or an impairment of the ability to cross-examine witness testimony. An appreciation of the risk of these prejudices is necessary in determin- ing if delay is unreasonable. 173 What prejudice was suffered by the Applicant in this instance? In this case, the Applicant was briefly in custody following his arrest on June 21, 2011, but released on conditions the same date. He was subsequently charged with other offences in September 2013, and spent eight days in 276 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

custody at that time. Ultimately, he was released on a global recogni- zance involving house arrest, $10,000 cash bail, and a surety in the amount of $10,000. These other charges were ultimately stayed by the Crown on May 15, 2015. Despite the house arrest, the Applicant was employed throughout. 174 In support of his Charter application, the Applicant swore an affidavit on November 27, 2015, setting out the impact of the charges on his em- ployment and personal life. He was cross-examined on this affidavit by the Crown on January 27, 2016. 175 In his affidavit, the Applicants states that he lost his job driving semi- trucks for Dawn Gordon Tractor Services shortly after his release as a result of his inability to possess a cellphone. He was unemployed for 2-3 months and then started a new company, Pro-Formance, with a partner who was also a truck owner. The Applicant’s role was to maintain the vehicles and supervise the drivers as he could not drive a truck without a cellphone. 176 In his affidavit, the Applicant asserts that he could not invest in the company due to the pending charges and the uncertainty as to whether or not he would be going to jail. I note, however, that he was able to borrow between $20,000 and $25,000 from his parents to start his own company by mid-2014, and eventually bought out the other partner in the com- pany. He was also able to post $10,000 in cash to secure his release in September 2013, and to obtain a surety, also in the amount of $10,000. 177 According to the Applicant, his partner ended the partnership, but he remained an employee of the company until April 2014. At that time, he quit this job at Pro-Formance to start his own trucking company, Sunrise Intermodel Inc., together with a partner. He borrowed money from his parents. By June 2015, the business had reached a point where they needed to purchase additional trucks. However, the Applicant could not commit to such financial obligations as he did not know if he would be going to jail. At this point, he bought out his partner in the business. Up until August, 2015, he was not able to leave the province and lost out-of- province trucking opportunities as a result. 178 According to the Applicant, he provides financial support to his fam- ily. His Mother works as a housekeeper, but his father is too ill to work. His 15 year old brother also lives with the family. He has two married sisters who no longer reside in the family residence. 179 During the period of house arrest, approximately 23 months, the Ap- plicant states that he was unable to sleep at nights due to the police R. v. Warring M. David Gates J. 277

checks undertaken between 11 p.m. and 3:00 a.m. The Applicant also attributes to the release conditions his failed attempts to reconcile with his wife, but offers no explanation or specifics in this regard. He was married in 2009 and then separated in 2010, prior to these offences He further states that he has been unable to visit his ailing grandmother in India as a result of the release conditions. Finally, he claims to have ex- perienced great stress, has lost almost all of his social life, as well as opportunities to re-marry. 180 I accept the fact that the Applicant has suffered some prejudice as a result of the laying of these charges, no doubt exacerbated with the pas- sage of time. However, he has been at liberty throughout relative to these charges. He was briefly in custody in relation to these charges but re- leased the same day. The eight days he was in custody in September 2013, arose as a result of other new charges. I am satisfied that the insti- tution of the new Criminal Code charges was the basis for the imposition of more restrictive release conditions, notably house arrest. 181 In my view, an accused should make reasonable attempts to alleviate the prejudicial effects of delay when it becomes apparent that he is suf- fering prejudice arising from the delay. A failure to bring his plight to the attention of the Crown and the Court will become relevant in an assess- ment of prejudice: R. v. Bennett (1991), 3 O.R. (3d) 193 (Ont. C.A.) at 222, aff’d [1992] 2 S.C.R. 168 (S.C.C.). 182 While he testified that he raised the possibility of varying his release conditions with prior counsel on more than one occasion, and likely at the time of his committal for trial on April 2, 2013, there is no evidence before me that any application was ever made or, indeed, that the Crown was ever requested to consider a variation. The record does disclose that on September 15, 2014, Mr. Chow, acting on behalf of the Applicant relative to his 2013 Criminal Code charges, did obtain a change to his release conditions so as to replace a situation of house arrest with a daily curfew between 9 p.m. and 5:00 a.m. Likewise, his trial counsel on the within charges obtained a bail variation on July 9, 2015, permitting the Applicant to possess a cell phone, but requiring him to produce his monthly phone charges to his bail supervisor. On August 16, 2016, the Court, on it’s own motion, proposed, and ultimately granted a variation in the Applicant’s in-person reporting requirement. 183 I am satisfied that many of the restrictions relied on by the Applicant in support of his claim of actual prejudice arose by virtue of the Criminal Code charges instituted in September 2013, rather than the charges pres- 278 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

ently before the court. I am also satisfied that the Applicant failed to take steps to reduce his prejudice by seeking variations in his release condi- tions. In my view, there was some responsibility on the Applicant to mit- igate his prejudice in this instance. His initial release conditions, includ- ing the prohibition from possessing a cellphone, were imposed by a Justice of the Peace, without the involvement of counsel, shortly after his arrest. Counsel could have easily brought an early application to vary the cellphone prohibition that created such difficulty for the Applicant in terms of maintaining his employment. While there is no guarantee that any such application would have been successful, the record reveals that later steps taken to vary his release conditions all resulted in positive changes. 184 Notwithstanding the existence of some restrictions, I find that the Ap- plicant was quite successful in continuing to be employed in his chosen field, admittedly with some modifications, throughout the period of his release. His lack of action in seeking to vary his release conditions leads me to conclude that he was not particularly prejudiced by the delay. Any prejudice he did suffer in this regard was not so serious as to lead him to seek earlier changes to his release conditions. Further, the Applicant’s failure to seek the earliest trial date after his committal strongly suggests that he was either unconcerned or indifferent to a quick resolution of this matter. 185 I accept the Applicant’s contention that he has suffered some prejudice as a result of the length of the delay in resolving this matter. However, I am not prepared to find that any stress and/or loss of sleep as a result of police checks to monitor his compliance with his curfew are properly linked to these charges. The requirement for house arrest, ulti- mately replaced by a daily curfew, was imposed following the institution of new criminal charges against the Applicant in 2013. It did not arise as a result of the trafficking charges. Moreover, he offers no details or spe- cifics beyond the assertion that the police conducted regular compliance checks. 186 I would note that the Applicant does not suggest that the delay in this case resulted in an impairment of his ability to make full answer and defence. 187 Also relevant to the analysis of prejudice in this case is the timing of the Applicant’s 11(b) claim. It is rare to make an application for a stay of proceedings after a guilty verdict has been issued by the Court. There R. v. Warring M. David Gates J. 279

are, however, a small number of cases which discuss the timing of the s. 11(b) application in the context of the overall Morin analysis. 188 In R. v. Purchase, 2012 BCSC 208 (B.C. S.C.), the applicant was convicted of drug and firearm offences before bringing an application under 11(b) on the day set for his sentencing hearing. The trial judge dismissed the application in a situation involving a period of delay of 44 months. Regarding the timing of the application, the Court noted, at para 151: ... the accused had an opportunity to raise his s. 11(b) rights before or at the July 2011 continuation of the trial, which was almost 41 months after the swearing of the Information. While the accused had every right to delay bringing his application until the date for sen- tencing, the fact remains that had he brought his application earlier, and succeeded, the cause of his hardships could have correspond- ingly ended that much earlier. 189 The weight accorded to the prejudice suffered by the accused in that instance was found to be less due to the timing of the application. In finding that the delay was ultimately reasonable, and did not infringe Mr. Purchase’s 11(b) rights, the Court considered the issue of prejudice at para 160: I have also considered the prejudice suffered by the accused over the total elapsed period of 44 months, irrespective of its causes, and in light of the public interest in the Charter values underlying s. 11(b), including treating citizens accused of crimes humanely and fairly. While this value applies no less to a citizen convicted of offences, the nature and significance of the interests protected by s. 11(b) narrow in scope after a conviction. 190 This finding is consistent with the decision of the British Columbia Supreme Court in Adam. Although the six accused persons in Adam made an 11(b) application prior to trial, the court commented that there were ample opportunities to raise 11(b) earlier in the proceedings. The Court in Adam dismissed the 11(b) application, finding the delay to be reasonable. Specifically, the Court found that no sufficient evidence was led by any of the accused to establish that they suffered prejudice. This was due to a combination of factors, including generous bail conditions, permission to work and travel and the late filing of the 11(b) application. At para. 162, the court concluded: The accused suffered hardship, but only a portion of it relates to de- lay as opposed to the charges themselves; and the degree of prejudice attributable to delay is inferentially lessened by his failure to seek 280 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

redress from the court at an earlier juncture, such as at the July 2011 continuation of the trial. 191 The following comments of Romilly J in Adam (at para. 174) are also applicable to the within matter: It is clear therefore that although the accused certainly had the ability to bring a timely application under s. 11(b) of the Charter they chose to wait until now to make the application. One could easily wonder why counsel did not make an effort to alleviate the prejudice that they claim that they were suffering by making an application for re- lief at a much earlier date. 192 In R. v. Goodkey, 2013 BCSC 1431 (B.C. S.C.), the Court dealt with a s. 11(b) application by accused, Goodkey and Krieger. As in Purchase, the application was brought following conviction, on the date scheduled for sentencing. As in Purchase, the Court in Goodkey considered the tim- ing of the application in the context of prejudice, as opposed to waiver. In finding that the delay did not prejudice either accused, the trial judge stated, at para 141: I am not satisfied the accused have been prejudiced in their ability to make full answer and defence to the charges against them. First, a delay application was not brought until after a guilty verdict. The ac- cused have not argued before me that their ability to make full de- fence was impaired by delay before deciding, in the case of Mr. Krie- ger, to call no evidence and, in the case of Mr. Goodkey, to lead evidence at trial. The affidavits that have been filed make no refer- ence to prejudice in the full answer and defence of the case. 193 Society’s interest in upholding the conviction following the finding of guilt was found to be a proper consideration under the final balancing step set out in the Morin analysis. By waiting until after the court’s ver- dict to bring the 11(b) application, the accused increased society’s inter- est in refusing a stay. In denying the application, the trial judge con- cluded, at para. 105: The charges faced by the accused are serious. There has been a find- ing of guilty. In the circumstances, in light of the seriousness of the charges, the finding of guilt, the very limited evidence of prejudice arising from delay, and the late application for relief, I am of the view that the applications for relief brought by the accused pursuant to s. 11(b) of the Charter should be dismissed. 194 The decisions in Purchase and Goodkey indicate that a person may bring an Askov application following conviction, so long as it is filed prior to the conclusion of the sentencing process. In both instances, how- R. v. Warring M. David Gates J. 281

ever, the timing was found to detract from the applicant’s claim to delay- related prejudice. Further, the interest of society in upholding a convic- tion once entered militates against an applicant seeking a stay of pro- ceedings for unreasonable delay only raised subsequent to that conviction.

Balancing 195 The consideration of the Morin factors in determining a s. 11(b) ap- plication is a balancing exercise. As stated by Greckol J. in R. v. Caines, 2011 ABQB 82 (Alta. Q.B.) at para. 577: There is no empirical calculation to determine the tipping point at which the delay becomes unreasonable and contrary to s. 11(b) of the Charter. Rather, it is a judicial balancing act that strives to protect Charter enshrined security, liberty and fair trial interests; values that uphold the rule of law; while at once honouring the important indivi- dual and community interests in bringing a case of this complexity and gravity to trial in an expeditious fashion. 196 Further guidance on how to actually conduct the analysis was provide by McLachlin J. (as she then was) in her concurring reasons in Askov, at paras. 139 - 140: The reasonableness of the delay may depend on a variety of factors. One is the prejudice caused by the delay. Absent waiver, a certain prejudice in a long-delayed trial may be inferred if not rebutted by the Crown; additional prejudice, such as impairment of the right to a fair trial due to the disappearance of witnesses, may further militate in the accused’s favour. Against this must be balanced factors related to the cause of the delay. Was it caused by the prosecution? If so, was the delay attributable to factors inherent in the case? Was the case one of particular difficulty? Were there unavoidable factors, such as geography or unavailability of a witness, which arguably jus- tify the delay? Are there unavoidable and justifiable systemic delays? On the other hand, was the delay in whole or in part caused by the accused? Did the accused agree to all or part of the delay? Did the accused waive his right to trial within a reasonable time? The ulti- mate question in each case is whether, after considering all relevant factors, the prima facie excessive delay can be justified as reasonable. (emphasis added) The factors to be considered will often pull in opposite directions. Thus, it is impossible to dictate in advance how the balancing is to be done in each case. Yet certain parameters can be suggested. The ac- 282 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

cused will rarely be entitled to the benefit of s. 11(b) where the Crown can show that the accused caused the delay or has suffered no prejudice as a consequence of the delay. On the other hand, lengthy and avoidable delay caused entirely by the Crown’s sloppiness or in- attention, or by unjustified delays in the legal system, will frequently entitle an accused to the benefit of s. 11(b). 197 In this case, the overall period of delay of 52 months is significant. However, a period of 32 months was waived by the Applicant. Further, I have previously found that 9 months of delay was occasioned by the ac- tions of the Applicant, and that the remaining delay, approximately 14 months, was the result of the inherent time requirements of the case. Fi- nally, I am satisfied that none of the delay arises as a result of the actions of the Crown. 198 Further, the Applicant has suffered some prejudice. His security inter- est was affected by the delay in that he faced stress occasioned by lengthy exposure to unresolved criminal accusations. There was also a prejudicial impact on the Applicant’s liberty interests, in the form restric- tive release conditions. 199 However, while the overall delay is significant, none of that delay is attributable to the Crown. The majority of the delay is a result of the inherent time requirements of the case. In my view that delay has not been excessive when all of the circumstances of the case are considered. The balance of the delay arose as a result of the actions of the Applicant. The delays in this case, while unfortunate, have been explained and can be justified as being reasonable. 200 The Applicant suffered some prejudice and hardship, but only a por- tion of it relates to delay as opposed to the charges themselves. Further, the degree of prejudice attributable to the delay is inferentially lessened by the Applicant’s failure to seek redress from the court at various points during the process and, indeed, by the timing of his application. The de- lay appears to have been of limited consequence to the Applicant and the prejudice suffered by the Applicant as a result of these charges is, in my view, moderate only. 201 Having considered all of the above, I am of the view that the total delay was not unreasonable and that the interest of bringing those charged with criminal offences to trial outweighs the Applicant’s interest in obtaining a stay of proceedings on account of delay. R. v. Warring M. David Gates J. 283

Conclusion 202 Accordingly, I find that the delay in this case is not unreasonable and that the Applicant’s s. 11(b) Charter right has not been breached. The application is dismissed. Application dismissed. 284 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[Indexed as: R. v. E. (B.)] Her Majesty the Queen and B.E. Alberta Provincial Court Docket: Calgary 150375749P1 2016 ABPC 91 T.C. Semenuk Prov. J. Judgment: April 21, 2016 Criminal law –––– Charter of Rights and Freedoms — Life, liberty and se- curity of person [s. 7] — Right to make full answer and defence –––– Ac- cused was charged with historical sexual assault said to have occurred between January 1, 1986 and March 1, 1990 — Complaint was made to police in 1990 and after investigation, it was decided not to lay any criminal charges — During course of 1990 police investigation, audio recorded statements were taken from complainant and accused — Police notes and Police Information Management System reports (“PIMS reports”) were prepared outlining steps taken in investi- gation — However, only remaining evidence was synopsis contained in police report retrieved from PIMS, original police notebook belonging to investigating detective, and handwritten notes retrieved by complainant from Alberta Family and Social Services (AFSS) — Complainant made second complaint to police in 2013 — After another police investigation, on March 30, 2015, information was laid charging accused with sexual assault — Defence counsel brought applica- tion to stay proceedings — Application granted — Stay of proceedings en- tered — Original investigation in 1990 was conducted by two detectives with distinguished careers working in Child Abuse Unit who determined that no charges be laid — Contents of original file would have been invaluable to de- fence in cross-examination of complainant in this case — Complainant in this case was 36-year-old woman who came forward with multiple serious allega- tions of sexual assault against accused alleged to have occurred almost 30 years ago — Accused was frail 86-year-old man now forced to defend himself without benefit of any of fruits of original investigation — Fundamental issue of fairness arose in circumstances of this case — There was no other evidence existing from original investigation that accused could use to challenge credibility of complainant in this case — Synopsis had no probative value; there was no evi- dence as to creation of document and it contain potentially misleading and highly prejudicial information relating to accused — Police notebook and hand- written notes from AFSS also had no probative value, and could not be used by defence counsel to conduct any meaningful cross-examination of any witness called at trial — Original file and contents being irrevocably lost, or more likely R. v. E. (B.) 285

destroyed, ability of accused to make full answer and defence was impacted to extent that s. 7 of Charter was violated — Actual prejudice was established. Criminal law –––– Charter of Rights and Freedoms — Charter remedies [s. 24] — Stay of proceedings –––– Accused was charged with historical sexual as- sault said to have occurred between January 1, 1986 and March 1, 1990 — Complaint was made to police in 1990 and after investigation, it was decided not to lay any criminal charges — During course of 1990 police investigation, audio recorded statements were taken from complainant and accused — Police notes and Police Information Management System reports (“PIMS reports”) were pre- pared outlining steps taken in investigation — However, only remaining evi- dence was synopsis contained in police report retrieved from PIMS, original po- lice notebook belonging to investigating detective, and handwritten notes retrieved by complainant from Alberta Family and Social Services (AFSS) — Complainant made second complaint to police in 2013 — After another police investigation, on March 30, 2015, information was laid charging accused with sexual assault — Defence counsel brought application to stay proceedings, al- leging violation of s. 7 of Canadian Charter of Rights and Freedoms — Applica- tion granted — Stay of proceedings entered — Original investigation in 1990 was conducted by two detectives with distinguished careers working in Child Abuse Unit who determined that no charges be laid — Viva voce evidence ad- duced by Crown to explain how original file was either lost or destroyed did not satisfy court that there wasn’t any duty or responsibility on police service at time, to preserve file — Absence of retention policy at time was not complete answer for Crown, particularly in cases involving allegations of serious child sexual abuse — Members of Child Abuse Unit ought to have known that even when files are concluded without charge, these types of cases have habit of re- surfacing many years later — Original file and contents being irrevocably lost, or more likely destroyed, ability of accused to make full answer and defence was impacted in this case to extent that s. 7 of Charter was violated — In order for stay to be granted, defence must satisfy Court that lost or destroyed evidence prejudiced accused in substantial or material way — If Court determines that despite lost or destroyed evidence, accused may nevertheless receive fair trial, stay will not be granted — Where credibility of complainant is main issue at trial, impact of lost or destroyed evidence must be considered in light of other evidence available to defence to challenge credibility — This was one of those “clearest of cases” where judicial stay of proceedings ought to be granted. Cases considered by T.C. Semenuk Prov. J.: R. c. C. (D.) (2012), 2012 SCC 48, 2012 CarswellQue 9359, 2012 CarswellQue 9360, [2012] S.C.J. No. 48, 96 C.R. (6th) 39, 352 D.L.R. (4th) 652, 290 C.C.C. (3d) 64, 435 N.R. 118, [2012] 2 S.C.R. 626, [2012] A.C.S. No. 48 (S.C.C.) — followed 286 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

R. v. B. (F.C.) (2000), 2000 NSCA 35, 2000 CarswellNS 50, [2000] N.S.J. No. 53, 142 C.C.C. (3d) 540, 182 N.S.R. (2d) 215, 563 A.P.R. 215, 73 C.R.R. (2d) 221 (N.S. C.A.) — considered R. v. Bradford (2001), 2001 CarswellOnt 69, 39 C.R. (5th) 323, (sub nom. R. v. B. (J.G.)) 151 C.C.C. (3d) 363, (sub nom. R. v. B. (J.G.)) 52 O.R. (3d) 257, (sub nom. R. v. B. (J.G.)) 139 O.A.C. 341, [2001] O.J. No. 107, (sub nom. R. v. B. (J.G.)) 79 C.R.R. (2d) 308 (Ont. C.A.) — considered R. v. C. (R.J.) (2011), 2011 ABQB 555, 2011 CarswellAlta 2108, [2011] A.J. No. 1194, 526 A.R. 138 (Alta. Q.B.) — considered R. v. Carosella (1997), 112 C.C.C. (3d) 289, 98 O.A.C. 81, 4 C.R. (5th) 139, [1997] S.C.J. No. 12, [1997] 1 S.C.R. 80, 31 O.R. (3d) 575 (headnote only), 142 D.L.R. (4th) 595, 207 N.R. 321, 41 C.R.R. (2d) 189, 1997 CarswellOnt 85, 1997 CarswellOnt 86, 2 B.H.R.C. 23 (S.C.C.) — considered R. v. Grimes (1998), 122 C.C.C. (3d) 331, 1998 CarswellAlta 7, 209 A.R. 360, 160 W.A.C. 360, 59 Alta. L.R. (3d) 210, 49 C.R.R. (2d) 308, [1998] A.J. No. 2, 1998 ABCA 9 (Alta. C.A.) — considered R. v. L. (C.J.) (2004), 2004 MBCA 126, 2004 CarswellMan 466, [2004] M.J. No. 410, 24 C.R. (6th) 252, 190 Man. R. (2d) 177, 335 W.A.C. 177, 197 C.C.C. (3d) 407, [2005] 9 W.W.R. 662 (Man. C.A.) — referred to R. v. La (1997), 1997 CarswellAlta 490, 1997 CarswellAlta 491, 213 N.R. 1, 116 C.C.C. (3d) 97, 148 D.L.R. (4th) 608, 200 A.R. 81, 146 W.A.C. 81, [1997] S.C.J. No. 30, 8 C.R. (5th) 155, 44 C.R.R. (2d) 262, [1997] 2 S.C.R. 680, [1997] 8 W.W.R. 1, 51 Alta. L.R. (3d) 181 (S.C.C.) — followed R. v. Lake (2005), 2005 NSCA 162, 2005 CarswellNS 538, 203 C.C.C. (3d) 316, [2005] N.S.J. No. 506, 240 N.S.R. (2d) 40, 763 A.P.R. 40 (N.S. C.A.) — referred to R. v. O’Connor (1995), [1996] 2 W.W.R. 153, [1995] 4 S.C.R. 411, 44 C.R. (4th) 1, 103 C.C.C. (3d) 1, 130 D.L.R. (4th) 235, 191 N.R. 1, 68 B.C.A.C. 1, 112 W.A.C. 1, 33 C.R.R. (2d) 1, 1995 CarswellBC 1098, 1995 CarswellBC 1151, [1995] S.C.J. No. 98, EYB 1995-67073 (S.C.C.) — followed R. v. R. (G.W.) (1996), 112 C.C.C. (3d) 179, 95 O.A.C. 225, 41 C.R.R. (2d) 148, 1996 CarswellOnt 4536, [1996] O.J. No. 4277 (Ont. C.A.) — referred to R. v. Sheng (2010), 2010 ONCA 296, 2010 CarswellOnt 2421, 254 C.C.C. (3d) 153, (sub nom. R. v. S. (G.)) 209 C.R.R. (2d) 48, (sub nom. R. v. S. (G.)) 266 O.A.C. 159, [2010] O.J. No. 1666 (Ont. C.A.) — considered R. v. Stinchcombe (1991), [1992] 1 W.W.R. 97, [1991] 3 S.C.R. 326, 130 N.R. 277, 83 Alta. L.R. (2d) 193, 120 A.R. 161, 8 C.R. (4th) 277, 68 C.C.C. (3d) 1, 8 W.A.C. 161, 18 C.R.R. (2d) 210, 1991 CarswellAlta 192, 1991 CarswellAlta 559, [1991] S.C.J. No. 83, EYB 1991-66887 (S.C.C.) — followed R. v. Svekla (2010), 2010 ABCA 390, 2010 CarswellAlta 2435, [2010] A.J. No. 1443, 265 C.C.C. (3d) 461, (sub nom. R. v. S. (T.G.)) 493 A.R. 346, (sub nom. R. v. S. (T.G.)) 502 W.A.C. 346 (Alta. C.A.) — considered R. v. E. (B.) T.C. Semenuk Prov. J. 287

R. v. Turner (2005), 2005 BCSC 438, 2005 CarswellBC 735, 130 C.R.R. (2d) 212, [2005] B.C.J. No. 700 (B.C. S.C.) — referred to R. v. W. (D.) (1991), 3 C.R. (4th) 302, 63 C.C.C. (3d) 397, 122 N.R. 277, 46 O.A.C. 352, [1991] 1 S.C.R. 742, 1991 CarswellOnt 80, 1991 CarswellOnt 1015, [1991] S.C.J. No. 26, EYB 1991-67602 (S.C.C.) — followed Statutes considered: 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 s. 7 — considered s. 24 — referred to s. 24(1) — considered Criminal Code, R.S.C. 1970, c. C-34 s. 246.1 [en. 1980-81-82-83, c. 125, s. 19] — considered Criminal Code, R.S.C. 1985, c. C-46 s. 271(1) — considered Freedom of Information and Protection of Privacy Act, R.S.A. 2000, c. F-25 Generally — referred to Privacy Act, R.S.C. 1985, c. P-21 Generally — referred to

APPLICATION by accused to stay proceedings under s. 24(1) of Charter of Rights and Freedoms, for alleged violations under s. 7 of Charter.

L. Cammack, for Crown A. Stewart, for Accused

T.C. Semenuk Prov. J.: Introduction 1 The accused is charged with a historical sexual assault. 2 It is alleged that the accused, who is now 86 years old, sexually as- saulted his granddaughter when she was between 7 and 10 years of age. She is now 36 years old. 3 The alleged sexual assault is said to have occurred between January 1, 1986 and March 1, 1990. 4 A complaint was made to police in 1990. After an investigation, it was decided not to lay any criminal charges. 5 During the course of the 1990 police investigation audio recorded statements were taken from the complainant and the accused. As well, police notes and PIMS Reports were prepared outlining the steps taken in the investigation. But for a single page Police Synopsis, the audio re- 288 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

corded statements, police notes and other PIMS Reports have been irrev- ocably lost or destroyed. 6 The complainant made a second complaint to the police in 2013. Af- ter another police investigation, on March 30, 2015, an Information was laid charging the accused with sexual assault. 7 Defence Counsel has filed a Charter Notice alleging a violation of section 7 of the Charter. 8 More specifically, it is submitted that the irrevocably lost or de- stroyed evidence impacts on the ability of the accused to make full an- swer and defence at trial. 9 If the Court finds a section 7 Charter violation, pursuant to section 24(1) of the Charter, it is submitted that the Court ought to enter a judi- cial stay of proceedings. 10 For the reasons that follow the Court finds a violation of section 7 of the Charter in the circumstances of this case. Pursuant to section 24(1) of the Charter, the Court enters a judicial stay of proceedings.

Charge 11 The accused is charged in an Information as follows: Count 1: Between the 1st day of January, 1986, and the 1st day of March, 1990, both dates inclusive, at or near Calgary, Alberta, did unlawfully commit a sexual assault upon [B.Q. (G.)], contrary to sec- tion 246.1 of the Criminal Code of Canada, R.S.C. 1970, c. C-34 (as amended) and section 271(1) of the Criminal Code of Canada, R.S.C. 1985 c. C-46 (as amended).

Facts 12 Counsel submitted to the Court a written Agreed Statement of Facts, marked Exhibit V-1, as follows: The Crown and the accused, Mr. [B.E.], admit the following facts for the purposes of dispensing with the proof thereof in the Charter, ss. 24 and 7 Application Mr. [E.] commenced on 5 June 2015 (the “Application”): The 1990 Investigation 1. In March 1990, Mr. Chris Nokleby of Alberta Family and Social Services reported to the Calgary police Ms. [B.G.] (n´ee [Q.])’s alle- gations of being touched in a sexual manner by her grandfather, Mr. [B.E.], during the summer of 1988. R. v. E. (B.) T.C. Semenuk Prov. J. 289

2. Detective Brian Skeet and Detective Cenaiko were assigned to in- vestigate this file (the “1990 Investigation”). They took steps including: a. On 1 March 1990, Detective Skeet conducted an audio-taped interview of Ms. [G.] (the “Complainant’s 1990 Inter- view”). Detective Cenaiko and Mr. Nokleby were also pre- sent. Ms. [G.] described how the accused touched her on one occasion during the summer of 1988, as described in the de- tailed police synopsis attached hereto and marked as Appen- dix “A” (the “Police Synopsis”). b. On 12 March 1990, Detective Skeet and Detective Cenaiko interviewed Mr. [E.] (the “Accused’s 1990 Interview”). 3. As per the Police Synopsis, after discussing the matter with Mr. [E.], the detectives felt Mr. [E.]’s denial of Ms. [G.]’s allegations was not strong, and the detectives did not believe him. The detectives were also of the view that the singular incident described by Ms. [G.] was not serious enough to warrant criminal charges. The investiga- tion was closed in a manner acceptable to Ms. [G.]’s family, who had shared their wish with the police that they be left to handle the matter internally. The 2013 Investigation and Subsequent Search for 1990s Records 4. On 7 July 2013, Ms. [G.] reported to the Calgary police allegations of being touched in a sexual manner, on several occasions, by her grandfather, Mr. [B.E.], during the years of 1986 to 1990. Det. Gra- ham was assigned to investigate these allegations. Later, the current charges were laid against Mr. [E.]. 5. Det. Graham searched for police records related to the 1990 inves- tigation. The police search for these records is described in the Re- sponse to Police Action Request memoranda dated 28 April 2015, 29 April 2015, and 8 May 2015, attached hereto and marked as Appen- dix “B” (the “PAR Responses”). 6. Det. Graham found the following records: a. the one page Police Synopsis; and b. Detective Skeet’s three pages of handwritten notes (attached hereto and marked as Appendix “C”). 7. Over the course of his investigation, Det. Graham also obtained 55 pages of government records disclosed to Ms. [G.] on 9 May 2013, in response to her Freedom of Information and Protection of Privacy Act request (attached hereto and marked as Appendix “D” (the “FOIP Response”)). These records have been disclosed to Mr. [E.]. 290 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

8. The police were unable to find any other records or exhibits re- lated to the 1990 Investigation. Specifically, the police were unable to find: a. Det. Cenaiko’s notes; b. any other police notes created by Detective Skeet; or c. any recordings or transcripts of the Complainant’s 1990 Inter- view; or the accused’s 1990 Interview. 9. None of the records of the 1990s Investigation provided to the de- fense elaborates on why Detectives Cenaiko and Skeet did not be- lieve Mr. [E.]’s denials of Ms. [G]’s allegations. 13 In addition to the Agreed Statement of Facts and Appendix, two for- mer members of the Calgary Police Service (CPS), Harvey Cenaiko and Brian Jeffrey Skeet, and one member, Detective Sheldon Ted Graham, were called to give viva voce evidence. 14 Harvey Cenaiko testified in examination-in-chief that he is presently the Chair and CEO of the Parole Board of Canada. 15 From 1977 - 2003 he was a member of the CPS. He initially worked 1 in the Patrol Division as a Constable. After 7 /2 years, he was promoted to the rank of Detective. As a Detective he worked in the Drug Unit, the Child Abuse Unit, the Sex Crimes Unit and the Homicide Unit, before being promoted to Staff Sergeant, and then Inspector, before retiring. 16 As a member of the CPS he never received any training regarding record retention. He received training regarding note taking and how to take notes on an investigative file. In 1990, when he was a Detective, there weren’t any computers, everything had to be done by hand. All of his notes and reports were handwritten. There was no computer access. All his files were logged in by hand in a general ledger book. 17 In the spring of 1988 he was transferred to the Child Abuse Unit, and he stayed there for approximately 2 years, before moving to the Sex Crimes Unit. There were only 6 investigators in the Child Abuse Unit. All his notes were attached to a manila coloured folding file with wire clips through them. He used foolscap paper to make all handwritten notes, and they stayed in the file. 18 He did have a police notebook, but it was rarely used because there was a lot of information on all the files. To prevent the loss of notes and confusion, all his handwritten notes were done on foolscap paper and attached to the file itself. R. v. E. (B.) T.C. Semenuk Prov. J. 291

19 In his 4 years with the Child Abuse Unit, he worked on over 600 investigations. He didn’t go back to files that were cleared or cleared with no charges. Files that were cleared by charge would be reviewed later with the Crown’s office and for any up and coming Court cases. 20 Any exhibits that were gathered were marked with an exhibit tag, and placed in a property room. If required for Court, the exhibit would be retrieved from the property room prior to Court. 21 In 1990 he was able to record statements of witnesses and accused persons. He worked closely with Child and Family Services (CFS). He received a number of phone calls from CFS regarding investigations that came to light with children disclosing offences of a serious sexual nature or physical nature. Victim statements would be tape recorded along with any statements made by accused individuals. Those taped statements would be placed in the case file and kept in a room. 22 In 1990 he used a cassette tape recorder to tape those statements. The 1 actual tapes were roughly 4 2 /2 inches in diameter. To the best of his recollection, after an interview, depending on the outcome of the case, the tapes would be placed in an envelope and placed in a manila file along with any other written notes made on foolscap paper. 23 Active files were placed in a filing cabinet. Completed files would be placed in a separate filing cabinet. Ongoing files were always kept on hand for the investigators and for the Crown’s office. 24 To the best of his recollection, cases that were cleared or cleared with no charges went to a separate filing room in the old Victoria Station on 11th Ave. and MacLeod Trail, in the mid -80s, and then moved to the new police headquarters in the Andrew Davidson Building on 6th Ave., and 1st S.E., shortly after the Olympics in Calgary in 1988. 25 He became involved in the investigation in the case at bar after the move to the new police headquarters in the Andrew Davidson Building. 26 Police headquarters are now located in the Westwinds Campus off McKnight Blvd. and 45th St., N.E., in Calgary. The move there occurred after he retired in 2003. 27 He did not keep any of his own records, notes or statements in his own filing cabinet. 28 To the best of his recollection, there was no police policy in relation to the retention of police notes. It was much later in the 90’s that some sort of record retention came into effect. In 1990, he was not aware of any type of record retention policy, other than you wanted to ensure that 292 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

your notes stayed with the file. The case number, PIMS and police re- ports and any foolscap notes all stayed together in the file. 29 He conducted an investigation in 1990 in the case at bar. He was able to review a police report prior to coming to Court, and vaguely remem- bers the details of the case. On reading the police report, he recalled go- ing to CFS and working with one of the social workers there. He inter- viewed a young victim who disclosed information, but it wasn’t of a sexual nature. He also interviewed the victim’s grandfather who didn’t provide any additional information. No charges were warranted at that time, and no charges were laid. 30 At the time, he was working with a partner, Detective Brian Skeet, and he may or may not have made notes that would have been in the file in this case. He asked Detective Graham if he was able to locate the file in this case, but it couldn’t be located. 31 He had no idea what happened to the file in this case. He thought that cases that were cleared by charge were “kept in the loop.” He surmised that cases that were unfounded, or not cleared by charge, may have been destroyed, he didn’t know. 32 He believed that there was a property room managed by civilian staff retaining old files, but he didn’t know, and was not sure about that. 33 On cross-examination he testified that the police report he read prior to coming to Court was the document found in Appendix A, attached to the Agreed Statement of Facts, marked Exhibit V-1 in the voir dire. 34 He testified that any document he prepared on the file would have been handwritten. He agreed that, at some point, there was a conversion of the document he prepared to the typed police report he reviewed prior to coming to Court. He did not prepare that police report. 35 His partner and lead investigator at the time of the initial investigation was Detective Skeet. 36 He thought Detective Skeet transcribed his hand written notes into the police report attached as Appendix A. 37 He didn’t recall if he or Detective Skeet wrote the original hand writ- ten PIMS Report. 38 He didn’t recall anything specific about the conversation had with the victim in this case at the CFS Office. 39 As to the process in conducting an interview with a victim at the CFS Office in 1990, he recalled they had a quiet room that it was very child R. v. E. (B.) T.C. Semenuk Prov. J. 293

focussed. The victim would be accompanied by their mother or father. They had a police tape recorder. Depending on who conducted the inter- view, the other person would take notes. They would talk to the victim on a very personal level trying to get as much information as possible. He didn’t recall if he conducted the interview or his partner, Detective Skeet. After conducting the interview, they would come back to the of- fice, look at the information, and make a determination of having the accused come to the office to interview him. 40 The interview with the victim in this case was audio recorded. As well, some notes were taken in conjunction with the audio recording. These notes would be hand written on some kind of loose leaf or fools- cap paper. They would not be contained in a police notebook. A PIMS Report, also hand written, would be prepared, and kept in the file along with the audio recording and other hand written notes. 41 He never had any discussion with anyone in the Crown Attorneys’ Office about this original file. He agreed that on many hundreds of files they would work with the Crown’s Office and provide a copy of the any police report, statements, witness statements, victim’s statements, and any audio recordings in prosecuting the case. That was not done in this case. 42 That was not done in this case because, on reviewing the file, there was no criminal sexual behaviour that took place. He and Detective Skeet did not feel that it was necessary to involve the Crown’s Office for an opinion. 43 He recalled that the interview they had with the accused in this case was audio recorded. He didn’t know what happened to that tape or where it may be located. 44 Other than what he read in the police report prior to coming to Court, he had no independent recollection of what the accused said when he was interviewed in 1990. 45 Brian Jeffrey Skeet testified in examination-in-chief that he is a re- tired member of the CPS. 46 He joined the CPS in 1977 and worked as a field Constable until 1989 when he was promoted to the rank of Detective. He worked in the Child Abuse Unit for 2 years, the robbery Unit for 1 year, and then the Homi- cide Unit for 4 years. In late 1995 or early 1996 he was transferred to uniform as a Sergeant. In 1997 he was promoted to Staff Sergeant and worked in the electronic surveillance area. In 1999 he was promoted to 294 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Inspector and worked in the Criminal Investigation Division in the field as Commander of 2 District, and then moved to Edmonton as the person in charge of the Criminal Intelligence Service Alberta. For his final 2 years, he was Commander of the Organized Crime Section, until he re- tired in 2005. 47 In 1990, as a Detective in the Child Abuse Unit, files were assigned in a file folder with the background of the complainant. Any notes of specific details of that investigation, interviews and such were handwrit- 1 ten on 8 /2 11 foolscap, and attached to the file folder. He also kept a notebook that was used for administrative purposes to account for his activities during the day in general form, but not specific detail. Any other product of the investigation, such as audio taped interviews, would also be placed in the file folder. 48 The files generated in the Child Abuse Unit were maintained in the office. At the conclusion of a file, the file would be placed on the Staff Sergeant’s desk. He wasn’t sure whether the Staff Sergeant file would then be put into a file cabinet. There were file cabinets in the office and that’s where the file folders ultimately went. 49 Files were concluded either as charged or not charged. They all went into a filing cabinet. 50 He held on to his personal notebooks until he retired, and then they were submitted into a property room. He kept his personal notebooks with him in his office, wherever that was. 51 In 1990 police headquarters had moved into the new Andrew David- son Building. 52 He did not remember his investigation in 1990 in the case at bar. He didn’t have any recollection of any of the details. 53 Prior to coming to Court he reviewed his personal notebook and read the Police Incident Report. Beyond putting the audio recordings done in this case in an envelope, and into the file, he had no idea what would have happened. 54 The 1990 investigation in this case did not culminate in any charges being laid. 55 After a file was concluded, whether there were charges laid or not, the concluded file folder would go to the Staff Sergeant to note it on his intake record, as to disposition. Then the file would go into a filing cabi- net in the office. R. v. E. (B.) T.C. Semenuk Prov. J. 295

56 On being referred to the Police Report, titled “Synopsis” contained in Appendix A, attached to the Agreed Statement of Facts, marked Exhibit V-1 in the voir dire, he recognized the document as a Police Report, but he had no specific recollection of the document. He recognized his name and regimental number in the Report, but back in 1990 this document did not exist. 57 His recollection of a PIMS Report back in 1990 was that they were all kept electronically in a mainframe computer. They had a PIMS terminal in the Child Abuse Office, that did not allow input, but they could pull documents out. 58 He had no idea what happened to the audio recordings and interview notes taken in the original 1990 investigation in this case. 59 On cross-examination he testified that the PIMS Report created back in 1990 did not look like the Police Report titled, “Synopsis” contained in Appendix A, it looked different back in 1990. He agreed that something happened between 1990 when he made the document, and the document as it now exists. He didn’t author any of the changes. To the best of his recollection, he would have hand written the original report. 60 He speculated that the document as it now exists, would have been generated from the original complaint and the interviews conducted in the CFS Office that was audio recorded. 61 He didn’t recall whether he conducted the interview at the CFS Office or took notes. 62 He didn’t recall specifically talking to a Crown Attorney about this specific file. The circumstances in this case, to the best of his recollec- tion, did not warrant any interaction with the Crown’s Office. 63 He apologized for testifying that concluded files went to the Staff Sergeant to record on his computer. There were no computers at that time. The file would have been recorded on a hard copy intake list with a file number, and placed into a filing cabinet. After it was placed into the filing cabinet, he had no idea what happened after that. 64 He recalled that concluded files would stay in the filing cabinet in the filing room in the office until they reached a point where they had no actual use for the files anymore. When that happened the files would be boxed up and put into a property room for archiving. The active files would continue to be put in a filing cabinet in a filing room in the office. 65 He wasn’t aware of any police retention policy for files when he was in the Child Abuse Unit. 296 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

66 Detective Sheldon Ted Graham testified in examination-in-chief that he looked back in the police records for records pertaining to the 1990 police investigation in this case. He ran a computer search on the com- plainant’s maiden name, and it came back with a 1990 file. He then re- viewed the PIMS Report for that file. 67 The PIMS records go back as far as 1970. From the old police files, only the “basics” are contained in the PIMS record. The “basics” include a synopsis, statements, depending on the file, and whatever the investiga- tor or officer put in the file at the time. 68 He then looked for more records than just the “basics”. He looked for any exhibits or documents that may have been in the property room, and there was none listed. 69 He also checked “Livelink”, which is the new police system where documents can be scanned and saved. He didn’t find anything for the 1990 file. Livelink has been in place for approximately 8 years. He wasn’t sure. 70 He also called the Records Management Unit to inquire about note- books for the previous investigators. He found a notebook for Detective Skeet. He wasn’t sure where that notebook was kept in the holding sys- tem. He believed the Records Management Unit came through the new police headquarters at the Westwinds Campus in N.E., Calgary. An off- site storage facility is maintained. If the notebooks are entered into the system, they are kept forever. If not, they are not kept. 71 Exhibits are entered into the property room. They are kept until and officer releases them, or the Court releases them. 72 Witness statements are entered onto the Livelink system now in place. He wasn’t sure about the previous police policies or procedures. 73 In this case, he found the old PIMS Report and Detective Skeet’s old notebook. He didn’t find anything else. Other than that, no other records were found. He didn’t find any records relating to the original interview of the complainant or the accused in this case. 74 On being shown the Police Report, titled “Synopsis” contained in Ap- pendix A, attached to the Agreed Statement of Facts, marked Exhibit V-1 in the voir dire, he testified that he printed this document off the PIMS system. 75 On cross-examination he testified that he had no hand in digitalizing the document he found on the PIMS system. R. v. E. (B.) T.C. Semenuk Prov. J. 297

76 He confirmed that only old police notebooks are kept by the Records Management Unit. Police notes written on loose leaf paper are not kept. 77 Prior to Livelink, he didn’t recall what system was used. The off-site storage facility keeps old police notebooks. He didn’t know anything about old police files. The off-site storage facility, to his knowledge, has always been used by the CPS.

Issues 78 The issues to be addressed in the voir dire are as follows: 1. Due to the passage of time, and conduct of the CPS, evidence from the original 1990 police investigation being irrevocably lost or destroyed, has the ability of the accused to make full answer and defence been impacted to such an extent that section 7 of the Charter has been violated in this case? 2. If section 7 of the Charter has been violated, pursuant to section 24(1) of the Charter, should the Court enter a stay of proceedings?

Law and Analysis Relevant Legislation 79 Sections 7 and 24 of the Charter read as follows: LIFE, LIBERTY AND SECURITY OF PERSON 7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice...... ENFORCEMENT OF GUARANTEED RIGHTS AND FREEDOMS / Exclusion of evidence bringing administration of justice into disrepute. 24. (1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of com- petent jurisdiction to obtain such remedy as the court considers ap- propriate and just in the circumstances. (2) Where, in proceedings under subsection (1), a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circum- stances, the admission of it in the proceedings would bring the ad- ministration of justice into disrepute. 298 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Case Law 80 Counsel referred the Court to a number of authorities, touching on the issues to be decided in this voir dire, including the following: R. v. Stinchcombe, [1991] 3 S.C.R. 326 (S.C.C.); R. v. O’Connor, [1995] 4 S.C.R. 411 (S.C.C.); R. v. Carosella, [1997] 1 S.C.R. 80 (S.C.C.); R. v. La, [1997] 2 S.C.R. 680 (S.C.C.); R. v. Grimes, 1998 ABCA 9 (Alta. C.A.); R. v. Svekla, 2010 ABCA 390 (Alta. C.A.); R. v. C. (R.J.), 2011 ABQB 555 (Alta. Q.B.); R. v. B. (F.C.), 2000 NSCA 35 (N.S. C.A.); R. v. R. (G.W.), [1996] O.J. No. 4277 (Ont. C.A.); R. v. Bradford, [2001] O.J. No. 107 (Ont. C.A.); R. v. Sheng, 2010 ONCA 296 (Ont. C.A.); and R. v. Turner, 2005 BCSC 438 (B.C. S.C.). 81 The law dealing with the issues in this case is complex, and case spe- cific. In order to better understand the principles to be applied, a brief review of some of the authorities cited above is warranted.

A. The Duty to Disclose 82 In criminal proceedings, the Crown is under a duty to disclose all rel- evant evidence in its possession that it proposes to use at trial. Further, the Crown must disclose all evidence that may assist the accused even if the Crown does not plan to adduce it. In Stinchcombe, the Supreme Court of Canada held that the duty to disclose was supported by the accused’s right to make full answer and defence as an aspect of fundamental justice under Section 7 of the Canadian Charter of Rights and Freedoms. The Crown possesses some discretion in determining what to disclose; thus, the duty to disclose is not absolute. However, where the defence alleges that the Crown has fallen short of its duty to disclose all relevant infor- mation the disclosure may be reviewed by a judge. In such a review, the onus rests upon the Crown to prove that the disclosure was complete or to justify an exception to the rule of complete disclosure. Where there is a breach of the right to full disclosure, the Court will examine the effect of the breach on the fairness of the trial. Where the accused was deprived of their right to make full answer and defence a breach of the accused’s Section 7 right to fundamental justice will be evident. There are a num- ber of remedies available to the Court; ranging from an adjournment of proceedings to new trial and even a complete stay of proceedings.

B. Lost or Destroyed Evidence 83 In Carosella, the Supreme Court of Canada established a regime to address the issue of lost or destroyed disclosure. In Carosella, the ac- R. v. E. (B.) T.C. Semenuk Prov. J. 299

cused was charged with gross indecency in March 1993. The charge re- lated to sexual contact with the complainant when she was a grade 7 student the accused was teaching. The alleged offences occurred in 1964. In March of 1992, the complainant visited a rape crisis centre for advice on how to lay charges against the accused for the alleged 1964 offences. The complainant had an interview with a social worker before she con- tacted police. In the interview at the rape crisis centre the social worker took notes about the complainant’s allegations against the accused. The accused later applied for disclosure of the records only to find that the records had been destroyed in compliance with the rape centre’s record keeping/destruction policy. The Court considered whether the non-dis- closure of the records violated the accused’s Charter rights, and if so, whether a stay of proceedings under section 24(1) of the Charter was the appropriate remedy. 84 The Supreme Court of Canada determined that the accused’s section 7 Charter rights were engaged. Having determined the right engaged, the Supreme Court of Canada considered whether disclosure was an inherent aspect of section 7 or whether section 7 protects the more general right of the accused to make full answer and defence. The significance of the difference in the interpretation is whether the accused will be responsible for demonstrating that the non-disclosure has actually prejudiced his case or not. Sopinka J., for the majority, stated that: [26] ... The entitlement of an accused person to production either from the Crown or third parties is a constitutional right. See R. v. Stinchcombe, [1991] 3 S.C.R. 326, and R. v. O’Connor, [1995] 4 S.C.R. 411. Breach of this right entitles the accused person to a rem- edy under s. 24(1) of the Charter. Remedies range from one or sev- eral adjournments to a stay of proceedings. To require the accused to show that the conduct of his or her defence was prejudiced would foredoom any application for even the most modest remedy where the material has not been produced. It would require the accused to show how the defence would be affected by the absence of material which the accused has not seen. [27] This Court has consistently taken the position that the question of the degree of prejudice suffered by an accused is not a considera- tion to be addressed in the context of determining whether a substan- tive Charter right has been breached. The extent to which the Char- ter violation caused prejudice to the accused falls to be considered only at the remedy stage of a Charter analysis. ... 300 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[36] I agree with this analysis of the principles. It is in accord with this Court’s decisions to which I have referred and with the princi- ples in Stinchcombe, supra. The foundation for the Crown’s obliga- tion to produce material which may affect the conduct of the defence is that failure to do so would breach the constitutional right of the accused to make full answer and defence. As summarized in R. v. Egger, [1993] 2 S.C.R. 451, at p. 466, a unanimous decision of this Court: ... the Crown has a duty to disclose to the accused all in- formation reasonably capable of affecting the accused’s ability to make full answer and defence, and to do so early enough to leave the accused adequate time to take any steps he or she is expected to take that affect or may affect such right. This obligation has constitutional underpin- nings deriving from s. 7 of the Canadian Charter of Rights and Freedoms. ... And, at p. 467: One measure of the relevance of information in the Crown’s hands is its usefulness to the defence: if it is of some use, it is relevant and should be disclosed- Stinchcombe, supra, at p. 345. This requires a determina- tion by the reviewing judge that production of the infor- mation can reasonably be used by the accused either in meeting the case for the Crown, advancing a defence or otherwise in making a decision which may affect the con- duct of the defence such as, for example, whether to call evidence. [37] The right to disclosure of material which meets the Stinchcombe threshold is one of the components of the right to make full answer and defence which in turn is a principle of fun- damental justice embraced by s. 7 of the Charter. Breach of that obligation is a breach of the accused’s constitutional rights with- out the requirement of an additional showing of prejudice. To paraphrase Lamer C.J. in Tran, the breach of this principle of fundamental justice is in itself prejudicial. The requirement to show additional prejudice or actual prejudice relates to the rem- edy to be fashioned pursuant to s. 24(1) of the Charter. [38] It is immaterial that the right to disclosure is not explicitly listed as one of the components of the principles of fundamental justice. That is true as well of the right to make full answer and defence and other rights. The components of the right cannot be separated from the right itself... R. v. E. (B.) T.C. Semenuk Prov. J. 301

[39] With respect to those who have taken a different view, requiring prejudice to be shown is a misapplication of this requirement. As stated in R. v. Stinchcombe (1994), (sub nom. R. v. Stinchcombe (No. 2)) 149 A.R. 167 (C.A.), at p. 174, aff’d [1995] 1 S.C.R. 754: Before the remedy such as a judicial stay of proceedings can be granted, the accused must establish on a balance of probabilities that the failure to produce or disclose what he seeks has impaired his right to make a full answer and defence or was so oppressive as to amount to an abuse of process. [Emphasis added.] [40] It follows from the foregoing that if the material which was destroyed meets the threshold test for disclosure or production, the appellant’s Charter rights were breached without the requirement of showing additional prejudice. The Court of Appeal accepted the submission that the propriety of the order for production was not in issue by reason of the fact that both the Crown and the complainant consented to the application for production. As between the Centre and the complainant, it was the latter’s consent that was required. The high-handed policy adopted by the Centre appears to ignore the fact that the right to confidentiality resides in the complainants and that destruction of records without the consent of the complainants is a violation of that right. Some complainants may wish to waive any right to confidentiality for a variety of reasons including the fact that the records may tend to support the complainant’s claim. [41] In my view, the consent was entirely appropriate in this case. Given the circumstances, it is clear that the file would have been dis- closed to the Crown. ... [47] I conclude from the foregoing that there was abundant evi- dence before the trial judge to enable him to conclude that there was a reasonable possibility that the information contained in the notes that were destroyed was logically probative to an issue at the trial as to the credibility of the complainant. This informa- tion, therefore, would have satisfied the test for disclosure estab- lished in Stinchcombe but as well the higher test in O’Connor. The destruction of this material and its consequent non-disclo- sure resulted in a breach of the appellant’s constitutional right to full answer and defence. [Emphasis added] 302 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

85 Sopinka J., having found that there was a breach of the accused’s right to make full answer and defence, which thus deprived him of his right to fundamental justice under section 7 of the Charter, went on to consider whether a stay of proceedings was appropriate. Sopinka J. stated that: [52] A judicial stay of proceedings has been recognized as being an extraordinary remedy that should only be granted in the “clearest of cases”. In her reasons in O’Connor, L’Heureux-Dub´e J. stated (at para. 82) that: It must always be remembered that a stay of proceedings is only appropriate “in the clearest of cases”, where the prejudice to the accused’s right to make full answer and defence cannot be remedied or where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued. [53] The trial judge, in determining that a stay of proceedings was an appropriate remedy in the circumstances of this case, instructed him- self in accordance with the standard in Young, supra, that the power to grant a stay is one that should only be exercised in the clearest of cases. That is the standard adopted by this Court. He further noted that credibility was a major issue in the case, and that as a result, the destruction of the documents was very significant. The trial judge stated (at p. 308) that: Here the alleged incidents with which the accused is con- fronted occurred some 30 years ago and I find that the accused has been seriously prejudiced, being deprived of his basic right of the opportunity to cross-examine the complainant on previous statements made by her as to the very incidents of sexual misconduct between her and the accused which are the subject matter of the indictment. That deprivation was caused by the deliberate actions of employees of the Sexual Assault Crisis Centre in de- stroying the complainant’s file without her consent, solely for the purpose of presenting [sic] the opportunity for cross examination by the accused in this trial and which would more than likely have assisted the accused in his defence. The accused has had his ability to make full answer and defence substantially impaired by the de- struction of the complainant’s file and, therefore, I find that his rights have been infringed under ss. 7 and 11(d) of the Charter and it would be unfair to allow the prosecu- tion to proceed where the accused has been deprived of R. v. E. (B.) T.C. Semenuk Prov. J. 303

that opportunity to cross-examine the complainant on statements previously made when substantially the whole of the Crown’s case is based on the credibility of the complainant. [Emphasis added.] [54] In addition to the factors mentioned by the trial judge in consid- ering the propriety of a stay of proceedings, there are other factors in this case which, in my view, merit consideration. As noted above, the notes taken by the Centre worker represented the first detailed ac- count of the alleged incidents. The notes constituted the only written record of the alleged incidents which were not created as a result of an investigation. The only other statements by the complainant were to the police and at the preliminary inquiry. The social worker Romanello had no recollection whatever of what was said to her. As for the complainant, even if she could recall she would not likely admit that what was said was inconsistent with her present testimony. As a result, any possibility of contradiction of the complainant by reference to her previous account was destroyed. [55] An additional important factor is the absence of any alternative remedy that would cure the prejudice to the ability of the accused to make full answer and defence. No alternative remedy was suggested by the Court of Appeal. This is one of the two factors mentioned by L’Heureux-Dub´e J. in the portion of her reasons to which I have re- ferred. The other factor is irreparable prejudice to the integrity of the judicial system if the prosecution were continued. [56] These two factors are alternatives. The presence of either one justifies the exercise of discretion in favour of a stay. The presence of the first factor cannot be denied. With respect to the second, in my opinion, the complete absence of any remedy to redress or mitigate the consequences of a deliberate destruction of material in order to deprive the court and the accused of relevant evidence would damage the image of the administration of justice. In this regard, the Court can take into account that the destruction of documents was carried out by an agency that not only receives public money but whose ac- tivities are scrutinized by the provincial government. The agency is required to develop a close liaison with justice agencies and se- cure material under its control which is not to be disclosed except where required by law. The justice system functions best and in- stils public confidence in its decisions when its processes are able to make available all relevant evidence which is not excluded by some overriding public policy. Confidence in the system would be undermined if the administration of justice condoned conduct 304 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

designed to defeat the processes of the court. The agency made a decision to obstruct the course of justice by systematically de- stroying evidence which the practices of the court might require to be produced. This decision is not one for the agency to make. Under our system, which is governed by the rule of law, decisions as to which evidence is to be produced or admitted is for the courts. It is this feature of the appeal in particular that distin- guishes this case from lost evidence cases generally. [Emphasis added] 86 On this basis, the majority of the Supreme Court of Canada deter- mined that the accused was entitled to a stay of proceedings. 87 The decision in La followed shortly after that of Carosella. However, La considered a situation where the evidence was lost and not destroyed. In La, a police officer tape recorded an interview with a thirteen year old runaway (the complainant) prior to any charges being laid. The interview was conducted in connection with a secure treatment application. The officer took limited notes. The investigation that followed led to the con- clusion that the complainant was part of a prostitution network. When the investigation was turned over to the vice squad, the initial tape recording of the complainant was not turned over. The vice squad completed its own interview with the complainant that was recorded and transcribed. The investigation by the vice squad resulted in the accused being charged for sexually assaulting the complainant. 88 At the preliminary inquiry, the police officer forgot that he had re- corded the initial interview with the complainant. He searched for the recordings but was unable to find them. The police officer stated that the reason he did not have further notes was that he was involved in a trau- matic event the day after the interview with the complainant and did not have time to complete his notation. 89 At trial, counsel for the accused made an application for a stay of proceedings on the basis that the Crown had failed to disclose the tape- recording. The trial judge granted the stay. However, on appeal to the Alberta Court of Appeal, the stay was overturned and a new trial was ordered. 90 At the Supreme Court of Canada, the test for lost evidence was articu- lated. Sopinka J., for the majority, stated that: [16] Since this Court’s decision in R. v. Stinchcombe, [1991] 3 S.C.R. 326 (S.C.C.), the obligation of the Crown to disclose all rele- vant information in its possession, whether inculpatory or exculpa- R. v. E. (B.) T.C. Semenuk Prov. J. 305

tory, whether the Crown intends to rely on it or not, has been well established. Witness statements raised a special problem in that case. We found that police notes should be disclosed if they exist, and if they do not, a “will-say” statement based on the information in the Crown’s possession and summarizing the anticipated evidence of the witness should be disclosed; see p. 344. [17] This Court recognised that the Crown’s duty to disclose gives rise to an obligation to preserve relevant evidence in R. v. Egger, [1993] 2 S.C.R. 451 (S.C.C.), at p. 472, where we noted that the Crown may be obliged to retain blood samples beyond the three- month statutory period in order to comply with the disclosure re- quirements resulting from Stinchcombe. [18] The issue of the Crown’s disclosure obligations where evidence has been lost arose during the new trial ordered by this Court in Stinchcombe. The police had misplaced a tape recording of an inter- view with a witness. During the interview, the witness had expressed doubts about the accuracy of her earlier testimony. The officer who interviewed her had died of a brain tumour. However, the Crown dis- closed a transcript of the interview. In setting aside the stay of pro- ceedings entered by the trial judge, the Alberta Court of Appeal noted that it is information contained in witness statements that must be disclosed, not the original statement: Stinchcombe (No. 2), supra. This Court agreed, [1995] 1 S.C.R. 754 (S.C.C.), at para. 2: The Crown can only produce what is in its possession or control. There is no absolute right to have originals pro- duced. If the Crown has the originals of documents which ought to be produced, it should either produce them or al- low them to be inspected. If, however, the originals are not available and if they had been in the Crown’s posses- sion, then it should explain their absence. If the explana- tion is satisfactory, the Crown has discharged its obliga- tion unless the conduct which resulted in the absence or loss of the original is in itself such that it may warrant a remedy under the Canadian Charter of Rights and Freedoms. [19] A similar principle was expressed in R. v. Chaplin (1994), [1995] 1 S.C.R. 727 (S.C.C.), at para. 25: In situations in which the existence of certain information has been identified, then the Crown must justify non-dis- closure by demonstrating either that the information sought is beyond its control, or that it is clearly irrelevant or privileged. 306 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[20] This obligation to explain arises out of the duty of the Crown and the police to preserve the fruits of the investigation. The right of disclosure would be a hollow one if the Crown were not required to preserve evidence that is known to be relevant. Yet despite the best efforts of the Crown to preserve evidence, owing to the frailties of human nature, evidence will occasionally be lost. The principle in Stinchcombe, supra, recognizes this unfor- tunate fact. Where the Crown’s explanation satisfies the trial judge that the evidence has not been destroyed or lost owing to unacceptable negligence, the duty to disclose has not been breached. Where the Crown is unable to satisfy the judge in this regard, it has failed to meet its disclosure obligations, and there has accordingly been a breach of s. 7 of the Charter. Such a fail- ure may also suggest that an abuse of process has occurred, but that is a separate question. It is not necessary that an accused establish abuse of process for the Crown to have failed to meet its s. 7 obligation to disclose. [Emphasis added] 91 Sopinka J., went on to explain how the Court determines when the Crown has satisfied the duty to explain the loss of the evidence. Sopinka J. stated that the Court should undertake an analysis of the circumstances surrounding the loss of the evidence. Specifically: [21] ... The main consideration is whether the Crown or the police (as the case may be) took reasonable steps in the circumstances to pre- serve the evidence for disclosure. One circumstance that must be considered is the relevance that the evidence was perceived to have at the time. The police cannot be expected to preserve everything that comes into their hands on the off-chance that it will be relevant in the future. In addition, even the loss of relevant evidence will not result in a breach of the duty to disclose if the conduct of the police is reasonable. But as the relevance of the evidence increases, so does the degree of care for its preservation that is expected of the police. 92 Sopinka J. maintained that the section 7 Charter analysis and the abuse of process analysis could be separate considerations. Notably, he stated that: [22] What is the conduct arising from failure to disclose that will amount to an abuse of process? By definition it must include conduct on the part of governmental authorities that violates those fundamen- tal principles that underlie the community’s sense of decency and fair play. The deliberate destruction of material by the police or other of- ficers of the Crown for the purpose of defeating the Crown’s obliga- tion to disclose the material will, typically, fall into this category. An R. v. E. (B.) T.C. Semenuk Prov. J. 307

abuse of process, however, is not limited to conduct of officers of the Crown which proceeds from an improper motive. See R. v. O’Connor, [1995] 4 S.C.R. 411 (S.C.C.), at paras. 78-81, per Justice L’Heureux-Dub´e for the majority on this point. Accordingly, other serious departures from the Crown’s duty to preserve material that is subject to production may also amount to an abuse of process not- withstanding that a deliberate destruction for the purpose of evading disclosure is not established. In some cases an unacceptable degree of negligent conduct may suffice. 93 In determining whether a stay of proceeding would be an appropriate remedy in the case of lost evidence, Sopinka J. stated: [23] In either case, whether the Crown’s failure to disclose amounts to an abuse of process or is otherwise a breach of the duty to disclose and therefore a breach of s. 7 of the Charter, a stay may be the ap- propriate remedy if it is one of those rarest of cases in which a stay may be imposed, the criteria for which have most recently been out- lined in O’Connor, supra. With all due respect to the opinion ex- pressed by my colleague Justice L’Heureux-Dub´e to the effect that the right to disclosure is not a principle of fundamental justice en- compassed in s. 7, this matter was settled in Stinchcombe, supra, and confirmed by the decision of this Court in R. v. Carosella, [1997] 1 S.C.R. 80 (S.C.C.). In Stinchcombe the right to make full answer and defence of which the right to disclosure forms an integral part was specifically recognized as a principle of fundamental justice included in s. 7 of the Charter. This was reaffirmed in Carosella. In para. 37 I stated on behalf of the majority: The right to disclosure of material which meets the Stinchcombe threshold is one of the components of the right to make full answer and defence which in turn is a principle of fundamental justice embraced by s. 7 of the Charter. Breach of that obligation is a breach of the ac- cused’s constitutional rights without the requirement of an additional showing of prejudice. To paraphrase Lamer C.J. in Tran [[1994] 2 S.C.R. 951], the breach of this prin- ciple of fundamental justice is in itself prejudicial. The re- quirement to show additional prejudice or actual prejudice relates to the remedy to be fashioned pursuant to s. 24(1) of the Charter. [24] The Crown’s obligation to disclose evidence does not, of course, exhaust the content of the right to make full answer and defence under s. 7 of the Charter. Even where the Crown has discharged its duty by disclosing all relevant information in its 308 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

possession and explaining the circumstances of the loss of any missing evidence, an accused may still rely on his or her s. 7 right to make full answer and defence. Thus, in extraordinary circum- stances, the loss of a document may be so prejudicial to the right to make full answer and defence that it impairs the right of an accused to receive a fair trial. In such circumstances, a stay may be the appropriate remedy, provided the criteria to which I refer above have been met. [25] It is not necessary to elaborate a test to be used in such cases in order to deal with the case at bar. Suffice it to say that, where the Crown has met its disclosure obligations, in order to make out a breach of s. 7 on the ground of lost evidence, the accused must establish actual prejudice to his or her right to make full answer and defence... [Emphasis added] 94 Sopinka J. drew a distinction between the destruction of evidence by third parties and the loss of evidence by the Crown. He stated that: [26] The appellant sought to draw a parallel between this case and Carosella which was released immediately before the hearing of this appeal. The two cases, however, are clearly distinguishable. In Carosella, the documents which were destroyed were relevant and subject to disclosure under the test in O’Connor, supra. The conduct of the Sexual Assault Crisis Centre destroyed the accused’s right under the Charter to have those documents produced. That amounted to a serious breach of the accused’s constitutional rights and a stay was, in the particular circumstances, the only appropriate remedy. Where, however, the evidence has been inadvertently lost, the same concerns about the deliberate frustration of the court’s jurisdiction over the admission of evidence do not arise. As the following pas- sage from the majority judgment (at para. 56) attests, we expressly distinguished the case from the lost evidence cases generally: The justice system functions best and instils public confi- dence in its decisions when its processes are able to make available all relevant evidence which is not excluded by some overriding public policy. Confidence in the system would be undermined if the administration of justice con- doned conduct designed to defeat the processes of the court. The agency made a decision to obstruct the course of justice by systematically destroying evidence which the practices of the court might require to be produced. This decision is not one for the agency to make. Under our system, which is governed by the rule of law, deci- R. v. E. (B.) T.C. Semenuk Prov. J. 309

sions as to which evidence is to be produced or admitted is for the courts. It is this feature of the appeal in partic- ular that distinguishes this case from lost evidence cases generally. [Emphasis added.] 95 Thus, where the Stinchcombe (and not O’Connor) principles govern the production of evidence and the evidence is lost by the Crown the test in La is to be applied. Therefore, in such an instance a stay will only be granted when the accused can prove that the loss is so prejudicial to the right to make full answer and defence that it impairs the right of an ac- cused to receive a fair trial. In comparison, when the evidence is de- stroyed by a third party, whose production is governed by the more strin- gent principles in O’Connor, an analysis of the reasons for the destruction will be as important as the analysis concerning the prejudice to the accused’s case. 96 In La, the Supreme Court of Canada held that the conduct of the po- lice officer who lost the tape recording did not indicate a failure to take reasonable steps in the circumstances to preserve the tape. Further, the explanation the officer gave about the circumstances of the loss of the tape did not disclose conduct that would amount to an abuse of process. Finally, the majority held that the accused was unable to establish that his right to make full answer and defence was impaired. The accused based his argument on the fact that the police officer had testified in the secure treatment hearing that the complainant told a “few lies” in her statement to him and the evidence of the lies was lost. However, the ma- jority held that the police officer’s statements alone about the complain- ant’s lies were sufficient to adduce evidence challenging the complain- ant’s credibility on cross-examination without the tape recording. Further, the subsequent testimony given by the complainant for the pur- poses of the investigation was available to the accused. On this basis, the appeal was dismissed and a stay was not granted.

(i) Alberta Case Law 97 In Grimes, The Alberta Court of Appeal considered an appeal on be- half of the Crown concerning a stay of proceedings. The accused was charged with multiple sexual assaults. The complainant alleged that the assaults took place when she was employed by the accused during a high school work experience program. The complainant complained to police in 1995 and the prosecution took place in 1996. The accused alleged that he was unable to establish an alibi defence because of the loss of the 310 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

school records indicating the days that the complainant worked for him. Further, the accused sought bank records to establish that the complain- ant had been untruthful in an affidavit. Both the bank records and the school records were destroyed after seven years. At trial, the accused ap- plied for a stay of proceedings based on lost evidence. The Alberta Court of Appeal held that the trial judge had applied the wrong test for deter- mining whether the lost evidence warranted a stay under section 7 of the Charter. Ultimately, the Alberta Court of Appeal held that the trial judge erred and ordered a new trial. 98 In Svekla, The Alberta Court of Appeal considered whether a stay of proceedings should have been granted where the investigating officer had lost much of the evidence of a historical assault prior to trial. The alleged sexual assault took place in 1995. In 1995, the complainant (then 5 years’ old) was living with her brother and the accused’s girlfriend, who was her foster parent. A few months after the alleged assault, the complainant disclosed the abuse to her grandmother and uncle. Her grandmother and uncle took her to the police station where a videotape of her statement was made and written statements from the grandmother and uncle were made. The investigating officer had statements taken from the accused and his girlfriend by police in the jurisdiction where they had relocated. The investigating officer reviewed the statements and closed the case. 99 The allegations resurfaced in 2006 and the accused was charged in 2007. At trial, the 1995 statements and some other evidence collected in 1995 had been lost. Only the investigating officer’s report was available. The report indicated that the accused’s brother did not witness her being assaulted and did not think that she had been assaulted. The complainant was eighteen years’ old at the time of the trial and she testified along with her grandmother, uncle, and the accused’s former girlfriend. The complainant’s brother did not testify. The trial judge refused a stay of proceedings. The Alberta Court of Appeal examined the reasoning of the trial judge: [18] The trial judge reviewed the relevant jurisprudence, including R. v. La, [1997] 2 S.C.R. 680(as to when a section 7 Charter breach is established), 148 DLR (4th) 608; R. v. Leduc (2003), 176 CCC (3d) 321 (Ont CA), leave denied [2003] SCCA No 411; R. v. O’Connor, [1995] 4 S.C.R. 411, 103 CCC (3d) 1; R. v. JGB (2001), 52 OR (3d) 257 (CA), leave denied [2001] SCCA No 131 and other cases con- cerning when a stay ought to be ordered in the context of lost evidence. R. v. E. (B.) T.C. Semenuk Prov. J. 311

[19] He concluded that a section 7 Charter breach was estab- lished because, absent an explanation for why the evidence was missing, there was unacceptable negligence: Stay Ruling at para 45. The materials were relevant to an alleged sexual assault and it was foreseeable that the investigation might be revived in the future. [20] In determining whether this was one of the clearest of cases jus- tifying a stay of proceedings, he noted the importance of the trier of fact being able to view and listen to recordings of the interview of a child complainant, in order to capture nuances: Stay Ruling at para 47. He acknowledged it was arguable that without this the appellant had suffered actual prejudice and his right to make full answer and defence had been breached. Conversely: [48] It is significant that in this case enough is known about the initial interview to put the accused in a position to advance a defence based in part on the inconsistency between P.L.’s initial statement and her testimony at the preliminary inquiry and at trial. A written statement of P.L.’s uncle, ... describes the initial disclosure of abuse. [The uncle] was called as a witness at trial. Det. Dealy’s report summarizes the essence of P.L.’s complaint. Dif- ferences are apparent on the information before the Court between P.L.’s complaint in 1996 and her current testi- mony. P.L. has no memory of giving her initial statement to the police, and therefore is unable to explain the reason for the inconsistencies. Defence counsel takes the position that the defence is irremediably prejudiced as he cannot cross-examine P.L. on the details of her prior statement. However, since P.L. has no independent memory of the earlier statement, it is speculative as to whether refreshing her memory through the videotape of the prior statement and her potential adoption of the same would be more beneficial to the accused or to the Crown in this situation. [21] He noted that PL’s trial testimony was not detailed and that her 1996 statement may have been more so. However, he added that in- consistencies in a child’s statement as to peripheral matters are not as significant as in the case of adult testimony. Here, he said, the case did not turn entirely on PL’s credibility, since there was additional material (including the appellant’s alleged inculpatory statement to MB about sexual activity with PL and the similar fact evidence about MB’s daughter: Stay Ruling at para 51). This additional evi- dence had to be weighed in assessing society’s interest in the con- tinuation of the prosecution. 312 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[22] The trial judge concluded that the effect of the missing evidence was arguably to make the appellant’s defence more difficult, but not to prejudice him in the sense of making it impossible to mount a de- fence. The appellant was still able to argue that PL’s lack of credibil- ity or reliability raised a reasonable doubt about his guilt. In the trial judge’s assessment, the administration of justice would be better served by allowing the prosecution to continue. ... [31] Did the lost evidence so prejudice the defence that a fair trial was not possible (JGB at para 33)? The trial judge was satisfied that enough was known about PL’s earlier statement that the appellant could still mount a defence based on the inconsistencies. His reasons do not suggest that he thereby undervalued the effect of the missing evidence. [Emphasis added] 100 Although the Alberta Court of Appeal held that the trial judge had not erred in refusing to grant a stay of proceedings, they noted that this in- stance was a “close case” which required defence to the trial judge. 101 In C. (R.J.), Hall, J. held that the accused, who was alleged to have assaulted his daughter between 1984 - 1986, was not entitled to a stay of proceedings on the basis of a breach of his section 7 Charter rights. The complainant came forward in 2006 and a warrant was issued in 2008 for the arrest of the accused. The accused was arrested in 2009 and a trial was set for 2011. In the interim, the mother of the complainant had died and one of the witnesses could not be located. Although the mother of the complainant and the other witness could have been useful to the ac- cused’s defence, they did not prejudice the accused’s right to a fair trial. Thus, Hall J. held that there was no infringement of the accused section 7 Charter rights.

(ii) Case Law from Other Jurisdictions 102 In B. (F.C.), the Nova Scotia Court of Appeal considered a Crown appeal against the trial judge’s stay of proceedings against the accused. The accused was charged with gross indecency, indecent assault, and in- cest. The complainant was the accused’s daughter and alleged that the assaults took place between 1974 and 1983. In 1984, the complainant disclosed the abuse to her mother. The RCMP became involved and a statement was made. The investigating officer determined that the com- plainant was unwilling to testify at trial. The Assistant Director of the Attorney General’s Office determined that the charges would not pro- R. v. E. (B.) T.C. Semenuk Prov. J. 313 ceed and the family went to counselling. In 1995, the complainant made another report to the RCMP about the alleged abuse after being informed that her sister had made a similar disclosure. In 1996, the accused was charged. At trial in 1997, the accused gave notice that he intended to apply for a stay of proceedings based on lost evidence. The lost evidence is as follows: [5] ... At some point, Crown and defence counsel signed and filed an undated agreed statement of facts respecting the lost evidence, which is summarized in the appellant’s factum as follows: • Family and Children’s Services maintained a file on the [B’s] and the contents of the file have been disclosed to the defence. • Helen Blau is deceased and the whereabouts of her file re- garding the complainant is unknown. Helen Blau’s file was never in the custody of the Crown attorney. • The RCMP file regarding [F.B.] was destroyed pursuant to policy some time after 5 years had elapsed since the file was closed. The exact contents of the file are unknown. • The RCMP had a policy to categorize and destroy files de- pending on what category the file is in. At the time the file was destroyed, the RCMP policy regarding sexual assault files was to destroy them after 5 years had elapsed. Presently the RCMP policy is to destroy sexual assault files only after 20 years have elapsed. • Corporal MacPhee’s personal notes from that time have been either lost or destroyed when his basement flooded. • The file of the per diem prosecutor at that time, now the Honourable Judge Robert M.J. Prince, has been destroyed, pursuant to the practices of the private law firm with which Mr. Prince was associated at the time. • The contents of the file of the Attorney General’s office in Halifax is available and has been disclosed to the defence. This includes the typewritten copy of the statement of [S.B.] referred to in the letter of Robert M.J. Prince to Martin Herschorn. [6] In addition, it is agreed that four reports written by Helen Blau, which contain details of her consultations with the respondent, S., and her mother, were found in the Family and Children’s Services file and have been disclosed to the defence. There is also agreement, based on the testimony of Corporal MacPhee and S., that a statement 314 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

handwritten by Corporal MacPhee and signed by S. was obtained in 1984 and it was presumably contained in the file that was destroyed. 103 The trial judge gave limited reasons for his decision to grant the stay of proceedings. On appeal, the Nova Scotia Court of Appeal aptly sum- marized the state of the case law relating to lost evidence as follows: [10] The basic principles applicable to the analysis of all three grounds of appeal raised in this case were summarized by Sopinka, J. in R. v. La, supra, commencing at para. 16. Those principles derived from R. v. Stinchcombe (No.1), [1991] 3 S.C.R. 326; R. v. Egger, [1993] 2 S.C.R. 451; R. v. Stinchcombe (No. 2), supra; R. v. Chap- man, [1995] 1 S.C.R. 727; R. v. O’Connor, supra; and, R. v. Carosella, supra, and further developed in La, are: (1) The Crown has an obligation to disclose all relevant infor- mation in its possession. (2) The Crown’s duty to disclose gives rise to a duty to preserve relevant evidence. (3) There is no absolute right to have originals of documents produced. If the Crown no longer has original documents in its possession, it must explain their absence. (4) If the explanation establishes that the evidence has not been destroyed or lost owing to unacceptable negligence, the duty to disclose has not been breached. (5) In its determination of whether there is a satisfactory expla- nation by the Crown, the Court should consider the circum- stances surrounding its loss, including whether the evidence was perceived to be relevant at the time it was lost and whether the police acted reasonably in attempting to pre- serve it. The more relevant the evidence, the more care that should be taken to preserve it. (6) If the Crown does not establish that the file was not lost through unacceptable negligence, there has been a breach of the accused’s s. 7 Charter rights. (7) In addition to a breach of s. 7 of the Charter, a failure to produce evidence may be found to be an abuse of process, if for example, the conduct leading to the destruction of evi- dence was deliberately for the purpose of defeating the dis- closure obligation. (8) In either case, a s. 7 breach because of failure to disclose, or an abuse of process, a stay is the appropriate remedy, only if it is one of those rare cases that meets the criteria set out in O’Connor. R. v. E. (B.) T.C. Semenuk Prov. J. 315

(9) Even if the Crown has shown that there was no unaccept- able negligence resulting in the loss of evidence, in some extraordinary case, there may still be a s. 7 breach if the loss can be shown to be so prejudicial to the right to make a full answer and defence that it impairs the right to a fair trial. In this case, a stay may be an appropriate remedy. (10) In order to assess the degree of prejudice resulting from the lost evidence, it is usually preferable to rule on the stay ap- plication after hearing all of the evidence. [11] The O’Connor criteria referred to in the eighth point are as stated by Justice L’Heureux-Dub´e at para. 82 of O’Connor: It must always be remembered that a stay of proceedings is only ap- propriate “in the clearest of cases”, where the prejudice to the ac- cused’s right to make full answer and defence cannot be remedied or where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued. [12] The principles elaborated in the La case are applicable to cases, such as this one, where the file was destroyed deliberately, provided the destruction was not unacceptably negligent and not for the pur- pose of thwarting disclosure to the accused. [Emphasis added] 104 When applying the principles to the facts of the case before it, the Nova Scotia Court of Appeal held that: [13] When the facts of this case are examined in light of these basic principles, it is clear, that the trial judge erred in entering a stay of proceedings. [14] With respect to the first two principles of La, there is no dispute that the Crown has disclosed all the information currently in its pos- session. However, there has been a failure to preserve the original statement given by the complainant in 1984 and the police officer’s notes taken in relation to the matter at that time. [15] Since the Crown does not have original documents from the first investigation, it must explain their absence. The explanation offered is that the file was destroyed by the RCMP pursuant to their file retention policy in existence at the time, five years after it was closed, apparently in 1989. The officer’s notebook was destroyed when his basement flooded. The evidence does not disclose the date of the flooding, but in any event, the respondent is concerned mainly with the police file which contained S.’s handwritten statement, and the arguments on appeal were directed only to that missing evidence. 316 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

The fourth question thus becomes: is the police file unavailable at this time due to “unacceptable negligence”? [16] In examining whether there was negligence, there must be some comparison with what was reasonable at the time the file was de- stroyed, with appreciation of the fact that the duty of full disclosure by the Crown was first determined to be part of a constitutional right to a fair trial, by the Supreme Court of Canada in Stinchcombe, supra in 1991. It was not until Egger, supra, in 1993, that the duty to disclose was said to include a duty to preserve evidence. In assessing the reasonableness of the policy in this case, it is useful to begin with a comparison of it to policies of other police departments around the same time. [17] ... In the absence of any evidence to the contrary, the conclusion can be drawn that it was not unusual in the pre-Stinchcombe era for police departments to destroy inactive files after a period of five to eight years. ... [33] To conclude the fifth and sixth aspects of the La inquiry, I find that in all the circumstances of this case, it was not unac- ceptable negligence for the RCMP to have destroyed the file of the 1984 investigation and, if the trial judge found that there was unacceptable negligence, he was in error. At this stage, there has not been shown to be a breach of the duty to disclose in this case. [34] As there is no indication in this case that the evidence was de- stroyed deliberately for the purpose of defeating the disclosure obli- gation, the seventh and eighth parts of the La test are inapplicable. [35] The ninth point from the La decision stipulates that even where there has not been unacceptable negligence, there could be a s. 7 breach necessitating a stay as the appropriate remedy, if the loss of evidence is so prejudicial to the right to make a full answer and defence, that it impairs the right to a fair trial. The tenth point is that the degree of prejudice is best assessed after hearing all the evi- dence, as in the Dowd case. ... [40] In this case, the trial judge erred in law in ordering a stay of proceedings in the absence of evidence of prejudice to the respon- dent’s right to make a full answer and defence. At this stage in the proceeding, it cannot be correctly found that this is one of the clear- est of cases justifying a stay. [Emphasis added] R. v. E. (B.) T.C. Semenuk Prov. J. 317

105 The Nova Scotia Court of Appeal allowed the appeal, set aside the stay, and ordered a new trial. 106 In Bradford, the Ontario Court of Appeal accepted the summary of the law on lost evidence articulated in B. (F.C.) by the Nova Scotia Court of Appeal at paras [10]-[11]. In Bradford, the Ontario Court of Appeal elaborated on the meaning of prejudice as it relates to the rights of the accused under section 7 of the Charter in an incidence of lost evidence. Weiler J.A., for the Court, stated: [5] Earlier, in O’Connor, supra, the two criteria for a stay referred to in the eighth point are expressed by Professor Paciocco and adopted by L’Heureux-Dub´e J., at p. 41, as comprising: (9) the prejudice caused by the abuse in question will be manifested, perpetuated or aggravated through the con- duct of the trial, or by its outcome; and (10) no other remedy is capable of removing the prejudice. [6] In assessing the prejudice to the accused’s right to make full answer and defence as secured by s. 7 of the Charter, it is impor- tant to bear in mind that the accused is entitled to a trial that is fundamentally fair and not the fairest of all possible trials. As stated by McLachlin J. in O’Connor, supra, at pp. 78-79: ... the Canadian Charter of Rights and Freedoms guarantees not the fairest of all possible trials, but rather a trial that is fundamentally fair: R. v. Harrer, [1995] 3 S.C.R. 562. What constitutes a fair trial takes into account not only the perspective of the accused, but the practical limits of the system of justice and the lawful interests of others involved in the process, like complainants and the agencies which assist them in dealing with the trauma they may have suffered. Perfection in justice is as chimeric as perfection in any other social agency. What the law demands is not per- fect justice but fundamentally fair justice. [7] In a similar vein, Justices McLachlin and Iacobucci commented in R. v. Mills, [1999] 3 S.C.R. 668 at 718 that fundamental justice embraces more than the rights of the accused and that the assessment concerning a fair trial must not only be made from the point of view of the accused but the community and the complainant. The fact that an accused is deprived of relevant information does not mean that the accused’s right to make full answer and defence is automatically 318 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

breached.1 Actual prejudice must be established: Mills, supra, 719- 720, citing R. v. La, [1997] 2 S.C.R. 680 at 693. [8] The fact that a piece of evidence is missing that might or might not affect the defence will not be sufficient to establish that irreparable harm has occurred to the right to make full answer and defence. Actual prejudice occurs when the accused is unable to put forward his or her defence due to the lost evidence and not simply that the loss of the evidence makes putting forward the position more difficult. To determine whether actual prejudice has occurred, consideration of the other evidence that does exist and whether that evidence contains essentially the same informa- tion as the lost evidence is an essential consideration. For exam- ple, in B. (F.C.), supra, the court held that where the complain- ant’s signed statement was lost, but a typed transcription that was probably accurate existed, the trial judge erred in entering a stay of proceedings. In R. v. J.D., a judgment of the Ontario Court of Appeal, delivered May 30, 1996, [1996] O.J. No. 1907, although the complainant’s statement was lost, the officer’s notes were available and the court held that it was speculative whether there were any inconsistencies between the complainant’s state- ment and the officer’s notes. [9] In addition to considering whether a contemporaneous oral state- ment or a copy of the written statement of the accused exists, the courts will consider, generally, all the surrounding background facts and circumstances of the complainant’s evidence (R. v. H.A., a judg- ment of the Ontario Court of Appeal, delivered October 23, 1998, [1998] O.J. No. 4351 at para. 13). The decision whether or not to grant a stay is very fact specific. Other factors that have emerged from the cases in deciding whether to grant a stay on account of lost evidence are: • the emotional or psychological status of the complainant at the time the allegations were made (H.A., supra; La, supra); • the time when the complaints were made in relation to when the allegations occurred, i.e. before or after therapy (H.A., supra); • whether the investigating officers who took the statement were available for questioning (B. (F.C.), supra, at p. 553); • whether the complainant made other statements prior to trial that the defence can use to attack her credibility (La, supra, at p. 111); R. v. E. (B.) T.C. Semenuk Prov. J. 319

• whether the Crown concedes that proposed substitute evi- dence is a statement of the complainant and may be used for the purposes of cross-examination of the complainant (B. (F.C.), supra, at p 554); • whether the statements that do exist appear to contain the same amount of detail as the lost statement (La, supra, at p. 111; R. v. B. (F.C.), supra); • the extent of the complainant’s present ability to recall the contents of the earlier statements (H.A., supra, at para. 13); • the complainant’s present ability to recall the details sur- rounding the various alleged incidents of abuse (H.A., supra; R. v. Daye, a judgment of the Ontario Court of Ap- peal, delivered June 7, 1999, [1999] O.J. No. 1994 para. 4); • any apparent or potential inconsistencies in the complain- ant’s trial testimony or between her other statements and her evidence at the preliminary hearing (H.A., supra; R. v. Mattingly (1995), 40 C.R. (4th) 376); • whether the accused was made aware of the contents of the lost evidence before its destruction or disappearance (B. (F.C.), supra, at p. 554); • whether the Crown gave any undertaking to the accused at the time that matters would not proceed with the result that the accused did not retain his own records (B. (F.C.), supra, at p. 550); and • what other witnesses had to say at the time in support or contradiction of the complainant’s allegations (B. (F.C.), supra, at p. 553; Daye, supra, at para. 2). [Emphasis added] 107 At trial, the accused made an application for a stay of proceedings on that basis that his section 7 Charter right had been breached by the loss of the signed statement of complaint made by the complainant in her 1984 complaint. Although subsequent complaints made in 1987 and 1991 and the complainant’s testimony at a 1995 hearing by the College of Physicians and Surgeons was available, the accused maintained that he had been deprived of the ability to effectively raise inconsistencies in the complainant’s testimony. The statements in question were allegedly lost in the transfer from the Crown Attorney back to the police when no charges were laid in 1984. The trial judge held that the evidence had been lost due to the negligence of the Crown and as a result, a breach had been established under section 7 of the Charter. The trial judge held that 320 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

the accused had suffered actual prejudice and there was no alternative other than a stay of proceedings to remedy the prejudice to the accused. 108 The Ontario Court of Appeal considered whether the evidence had been lost due to the unacceptable negligence of the Crown and whether there was actual prejudice to the accused right to make full answer and defence because of the lost evidence. On the facts, the Court of Appeal held that the trail judge reasonably concluded that the statement had been lost because of the unacceptable negligence of the Crown. Specifically, when charges were initially not laid, the police informed the accused that they would be keeping the statement and could use it if charges were laid at a later date. The result of the police action was that the significance of the evidence for future proceedings required that greater care should have been taken to preserve the evidence. 109 Weiler J.A., for the Court, stated that the signed statement, which was lost, was considered in a vacuum. Although the complainant had a his- tory of manipulation and lying, the other statements that she made were not considered when the trial judge analyzed the prejudice caused to the accused by the loss of the one signed statement. Weiler J.A., having con- sidered the facts stated: [46] ... while the task of the defence was made more difficult because of the missing signed statement, the respondent’s trial was not funda- mentally unfair. In a situation such as this, the administration of jus- tice is better served by permitting the prosecution to continue in these circumstances rather than by staying the proceedings and thereby ef- fectively acquitting the respondent. The present facts do not warrant the issuance of an order overriding the manifest societal interest in the effective prosecution of criminal charges. Simply, this is not one of those “clearest of cases” in which a stay of proceedings is necessary for the interests of justice. I would therefore allow this ground of appeal. In response to the accused’s alternative argument that the loss of the evi- dence constituted an abuse of process, Weiler J.A. stated: [47] ... It is now well-settled that abuse of process is a separate rem- edy for the breach of s. 7 Charter rights. Applying the authorities to the present case, I am of the opinion that the loss or destruction of the complainant’s statement does not constitute abuse of process. There was no suggestion of prosecutorial misconduct or bad faith in the destruction of the statement. The facts do not establish that the re- spondent’s trial was such as to violate the principles of justice under- lying the community’s sense of fair play and decency. R. v. E. (B.) T.C. Semenuk Prov. J. 321

110 On this basis, the Ontario Court of Appeal held that the trial judge had erred in granting a stay of proceedings. Thus, the appeal was al- lowed, the order granting the stay was quashed and a new trial was ordered. 111 In Sheng, the Ontario Court of Appeal considered a Crown appeal against the trial judge’s stay of proceedings against the accused. The ac- cused was charged with sexually assaulting the two young daughters of his girlfriend between 1988 and 1994. In 1994, the mother of the girls notified the Children’s Aid Society about the abuse, an investigation commenced, but no charges were laid. A few months later, the father of the girls reported the allegations to the police. Shortly after the investiga- tion commenced, the police notified the accused that they would not be proceeding with any charges. The police subsequently destroyed or lost the audiotapes and their investigation notes. 112 In 2005, the older complainant met with the accused and secretly taped their conversation in which she raised the allegations of abuse. The video tape of the conversation was taken to the police and charges were laid against the accused. At trial, the accused was found guilty. However, one month later the judge entered a stay of proceedings on the basis that the accused “was prejudiced by the loss of the evidence and was pre- vented from making full answer and defence” and “there is no way of readdressing the infringement of the accused’s right other than ordering a stay of proceedings.” Laskin J.A. stated that although the judge was cor- rect to consider the application for a stay of proceedings, the sequence of his decision was wrong. 113 On Appeal, Laskin J.A. held that the Crown had satisfactorily ex- plained the loss of the audiotapes. He noted that contrary to the findings of the trial judge, the loss of the audiotapes was not caused by any “unac- ceptable negligence” and therefore did not constitute a breach of the Crown’s duty to disclose under section 7 of the Charter. Laskin J.A. then considered whether the loss of the notes and audiotapes had been so prej- udicial to the accused that he was entitled to a stay. Laskin J. A. reaf- firmed the principle that: [44] A stay is granted rarely. It is a remedy of last resort that must meet the “clearest of cases” standard. It is an exceptional remedy because its effect is to deprive society of an adjudication on the merits. ... 322 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[46] When evidence is lost, assessing prejudice is invariably prob- lematic and, to some degree, speculative. However, the respon- dent was not entitled to a stay merely because he was deprived of relevant evidence. To justify a stay the respondent had to show that the lost evidence prejudiced him in a substantial or material way. ... [47] I agree that the lost evidence could have assisted the respon- dent in attacking the credibility of the complainants. However, I do not agree that the trial judge’s conclusion justifies a stay be- cause, in reaching that conclusion, he does not address the im- pact of the lost evidence in the light of other evidence available to the defence to challenge the credibility of Jennifer and Tiffany. In La, Sopinka J. wrote that the availability of other evidence to attack a complainant’s credibility is a critical consideration in as- sessing the degree of prejudice from lost evidence. [Emphasis added] 114 Laskin J.A. held that the Defence had sufficient evidence available to it and that the lost evidence did not meet the standard of prejudice re- quired to warrant a stay of proceedings. On the availability of alterna- tives to a stay of proceedings, Laskin J.A. stated: [53] I end this section of my reasons by noting that the lost evidence may have merited a remedy short of a stay. However, the trial judge did not consider at all whether another remedy - for example, the exclusion of evidence - would have redressed any prejudice from the lost evidence. For nor did the trial judge take into account the lost evidence in his assessment of the complainants’ credibility and relia- bility. Instead, in finding their evidence both credible and reliable in his reasons for conviction, the trial judge does not even mention the lost evidence. 115 Laskin J.A. set aside the stay of proceedings and ordered a new trial.

Application of Principles of Law to the Facts 1. Due to the passage of time, and conduct of the CPS, evidence of the original 1990 police investigation being irrevocably lost of destroyed, has the ability of the accused to make full answer and defence been impacted to such an extent that section 7 of the Charter has been violated? 116 Having regard to the totality of the evidence adduced in the voir dire, I make the following findings of fact: R. v. E. (B.) T.C. Semenuk Prov. J. 323

1. On March 1, 1990, as a result of a complaint made by the com- plainant to Alberta Family and Social Services (AFSS), and then to the CPS, Detectives Skeet and Cenaiko, who were assigned to investigate the complaint, conducted an audio-taped interview of the complainant at the AFSS Office in Calgary. 2. Neither Detective Skeet nor Detective Cenaiko could recall who conducted the interview, or who took notes of the interview. It was an either-or situation. That interview was audio-taped and notes were taken. 3. The notes taken during the interview were not recorded in a police notebook. A police notebook was rarely used back then because there was a lot of information on all the files. To prevent loss or confusion, all notes taken of any significance during an investiga- 1 tion were handwritten on 8 /2 11 foolscap paper. A police notebook was only used to record general information not signifi- cant to any file. 4. The audio-tape was done on a cassette tape recorder. The actual 1 tapes were 4 2 /2 inches in diameter. The actual audio-tape was placed in an envelope by Detective Skeet and any foolscap notes taken during the interview were attached to a manila file folder. 5. On March 12, 1990 Detectives Cenaiko and Skeet interviewed the accused. That interview was also audio-taped and handwritten notes were taken on foolscap paper. There is no evidence who conducted the interview and who took hand written notes. Both the actual audio-tape and handwritten notes were also attached to the manila file. 6. After the audio-taped interviews, Detective Skeet, who was the lead investigator, prepared a handwritten PIMS Report on fools- cap paper that was attached to the file along with the actual audio- tapes and any other foolscap notes taken. 7. The Police Report containing the “Synopsis” marked Appendix A, attached to the written Agreed Statement of Facts shown to Detec- tives Cenaiko and Skeet prior to trial was not prepared by either of them. They had not seen that document prior to trial. Detective Skeet speculated that the document may have been generated by someone from the original complaint and audio-tape interviews. 8. That document had been retrieved by Detective Graham from the CPS PIMS computer system and shown to both Detectives 324 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Cenaiko and Skeet prior to trial. He also retrieved Detective Skeet’s old police notebook from the CPS Records Management Unit kept in a civilian staffed, off-site, storage facility in Calgary. 9. All files generated by investigation by the Child Abuse Unit were recorded on a hard copy intake list with a file number and kept in a filing cabinet in the office at police headquarters located in the Andrew Davidson Building in downtown Calgary until the file was concluded. 10. After the investigation was concluded in this case, no charges were laid. Nobody in the Crown’s office was consulted on whether charges ought to have been laid. 11. When files were concluded either by charge or no charges were laid, the original file was passed on to the Staff Sergeant to note in his intake record. The file was kept in a filing cabinet in the office. Archived files were then boxed and placed into an off-site police storage facility. 12. Other than what was contained in the Police Report “Synopsis” shown to Detectives Cenaiko and Skeet prior to trial, neither of them had any independent recollection about any specific details of the original investigation in this case. 13. There is no evidence in this case whether the original manila file and contents relating to the original police investigation in 1990 in this case conducted by Detective’s Cenaiko and Skeet was lost or destroyed. Detective Cenaiko speculated that the original file may have been destroyed. 14. Other than old police notebooks kept by the CPS Records Man- agement Unit, at the time of the original police investigation in 1990 in this case, there was no CPS policy in place regulating the retention of old police files and contents. 117 As can be gleaned from the authorities reviewed above, for the pur- pose of dealing with an alleged section 7 Charter application, the SCC has drawn a distinction between relevant evidence that is destroyed, as opposed to being lost. 118 Where evidence that meets the threshold test for disclosure or produc- tion is destroyed, a section 7 Charter violation will be established with- out the requirement that the accused also show additional prejudice. The requirement to show additional prejudice or actual prejudice only relates to the remedy to be fashioned pursuant to section 24(1) of the Charter. R. v. E. (B.) T.C. Semenuk Prov. J. 325

119 Where evidence that meets the threshold test for disclosure or produc- tion is lost or destroyed, the Crown carries an onus of proof to explain the loss or destruction. Where the Crown’s explanation satisfies the trial judge that the evidence was not lost or destroyed owing to unacceptable negligence, the duty to disclose has not been breached and there is no section 7 Charter violation. If the police conduct is reasonable, the loss or destruction of relevant evidence will not result in a breach of the Crown’s disclosure obligation and section 7 Charter violation. That be- ing said, as the relevance of the lost or destroyed evidence increases, so too does the degree of care for preservation that is expected of the police. Where the Crown has met its disclosure obligations, and explained the loss or destruction, in order to make out a breach of section 7 of the Charter the accused must establish actual prejudice to his right to make full answer and defence. 120 Actual prejudice occurs when the accused is unable to put forward his defence due to the lost or destroyed evidence, and not simply that the lost or destroyed evidence makes the defence task more difficult. In deter- mining actual prejudice, consideration of other evidence that does exist and whether it contains essentially the same information is essential. (i.e., where the original statement of a complainant is lost, a typed transcript of that statement that is probably accurate or police notes as to what was said by the complainant will suffice).

Ruling 121 In the case at bar, the main issue at trial is credibility. The accused having testified, this is a “she said, he said” case. The credibility of the accused as a witness is to be assessed in accordance with the principles enunciated by the SCC in R. v. W. (D.) (1991), 63 C.C.C. (3d) 397 (S.C.C.), and more recently, R. c. C. (D.), 2012 SCC 48 (S.C.C.). In the proper application of W. (D.), it is preferable to consider the evidence given by the accused first. See: R. v. L. (C.J.) (2004), 197 C.C.C. (3d) 407 (Man. C.A.). As well, the evidence of the accused is not to be con- sidered in isolation, but along with all the evidence, including the evi- dence given by the complainant. See: R. v. Lake (2005), 203 C.C.C. (3d) 316 (N.S. C.A.). 122 In the circumstances of this case, the initial investigation in 1990 was conducted by Detectives Cenaiko and Skeet, members of the CPS Child Abuse Unit. Without computers at the time, and in accordance with the accepted procedure a file was created. All the fruits of the original inves- 326 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

tigation were contained in a manila file folder. In this case, that file con- tained audio-taped statements of both the complainant and the accused, handwritten notes taken during the taking of those statements, along with a handwritten PIMS Report prepared by Detective Skeet, the lead investigator. 123 The original file, along with all the contents, has gone missing. Aside from speculation, there is no evidence before the Court as to whether the file and contents was lost or destroyed. 124 Prior to the file being concluded, it was recorded on a hard copy in- take list with a file number and kept in a filing cabinet in an office at CPS headquarters in the Andrew Davidson Building, in downtown Cal- gary. When the file was concluded in this case, without charges being laid, it was given to the Staff Sergeant to note in his intake record, and put into another filing cabinet in the office. Subsequently, the file was archived, boxed, and put into an off-site CPS storage facility. What hap- pened to the file after that is a mystery. 125 At the time, pre-Stinchcombe, the CPS did not have a retention policy in place. That being said, based on the viva voce evidence heard in the voir dire, the CPS had direct control over the file until it was archived, boxed and taken to the off-site storage facility. I do not believe that the file was lost in this case. It is more likely to have been destroyed after an indefinite period of time, at the off-site storage facility, and I am pre- pared to so find in making my ruling in this case. 126 The only remaining evidence in this case is the “Synopsis” contained in the Police Report retrieved by Detective Graham from the CPS PIMS System, Detective Skeet’s original police notebook, also retrieved by Detective Graham from the CPS Records Management Unit, and the handwritten notes retrieved by the complainant on her request from Al- berta Family and Social Services (AFSS) pursuant to the Freedom of In- formation and Protection of Privacy Act (Privacy Act). 127 As to the “Synopsis” in the Police Report retrieved by Detective Gra- ham from the CPS PIMS computer system, that document was not cre- ated by Detective Skeet. He never saw that document prior to trial. There is no evidence who created that document, how it was created, who put it into the PIMS System and when. This document has no probative value. 128 Without knowing who created that document, how it was created, and who put it into the CPS PIMS System and when, Defence Counsel could not use this document to properly cross-examine any witness called to testify at trial. R. v. E. (B.) T.C. Semenuk Prov. J. 327

129 As to Detective Skeet’s notebook, I am satisfied that it has no proba- tive value. According to the viva voce evidence given by Detective Cenaiko and Skeet, to prevent loss or confusion, police notebooks at the time, were not used to record anything of significance in the investiga- tion. All notes of significance were handwritten on foolscap paper and attached to the original file. A perusal of Detective Skeet’s notebook confirms that there is nothing of significance recorded. 130 As to the handwritten notes retrieved by the complainant on her re- quest from AFSS pursuant to the Privacy Act, I am satisfied that these notes have no probative value. The person who made these notes is un- known. The name of the person who wrote those notes received by the complainant has been redacted. No meaningful cross-examination by the Defence of any witness called at trial is possible on these notes. 131 Aside from the “Synopsis” in the Police Report, Detective Skeet’s old notebook, neither Detective Cenaiko nor Detective Skeet had any inde- pendent recollection of the details of their original investigation. 132 In short, there is no probative evidence in this case pertaining to the original 1990 police investigation that could be used by Defence Counsel to properly cross-examine the complainant. 133 Finally, the viva voce evidence adduced by the Crown in the voir dire to explain how the original file was either lost or destroyed does not sat- isfy me that there wasn’t any duty or responsibility on the CPS at the time, to preserve the file. The absence of a CPS retention policy at the time is not a complete answer for the Crown, particularly in cases involv- ing allegations of serious child sexual abuse. Members of the CPS Child Abuse Unit ought to have known that even when files are concluded without charge, these types of cases have a habit of resurfacing 10, 20 or 30 years or more, down the road. The number of reported cases across Canada dealing with historical sexual assaults is well documented and publicised. 134 In my view, the original file and contents being irrevocably lost, or more likely destroyed, the ability of the accused to make full answer and defence has been impacted in this case to such an extent that section 7 of the Charter has been violated.

2. If section 7 of the Charter has been violated, pursuant to section 24(1) of the Charter, should the Court enter a stay of proceedings? 135 Again, as can be gleaned from the authorities reviewed above, a stay of proceedings pursuant to section 24(1) of the Charter for a violation of 328 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

section 7 Charter relating to lost or destroyed evidence is a remedy of last resort that will only be granted in the “clearest of cases.” 136 In order for a stay to be granted the defence must satisfy the Court that the lost or destroyed evidence prejudiced the accused in a substantial or material way. Actual prejudice must be shown. If the Court deter- mines that despite the lost or destroyed evidence, the accused may never- theless receive a fair trial, a stay will not be granted. A fair trial does not mean a perfect trial. It is one where considerations, other than those strictly relating to the accused, come into play. The practical limits of the justice system, the lawful interests of others involved in the process, like the complainant, and agencies which assist them in dealing with any trauma suffered. Fundamentally fair as opposed to perfect justice is what the law demands. Where the credibility of a complainant is the main is- sue at trial, the impact of the lost or destroyed evidence must be consid- ered in the light of other evidence available to the defence to challenge credibility.

Ruling 137 The original investigation in this case in 1990 was conducted by Detectives Cenaiko and Skeet. Both of these officers have had distin- guished careers with the CPS. Both started as street Constables and, by the time of their retirement, held the rank of Inspector. As Detectives with the Child Abuse Unit in 1990, I cannot imagine that their original investigation in this case was anything but thorough and complete. When the file was concluded, without any consultation with the Crown’s Of- fice, they had determined that no charges be laid. All the fruits of their original investigation have been lost, but more likely destroyed. In my view, the contents of the original file would have been invaluable to the Defence in the cross-examination of the complainant in this case. 138 The complainant in this case is now a mature 36 year old woman. After therapy she has now come forward with multiple serious allega- tions of sexual assault against the accused that are alleged to have oc- curred almost 30 years ago. The accused is a frail 86 year old man. He is now forced to defend himself on these serious allegations without the benefit of any of the fruits of the original investigation. There is a funda- mental issue of fairness that arises in the circumstances of this case. 139 Unlike other cases reviewed in the above, there is no other evidence existing from the original investigation that the accused can use to chal- lenge the credibility of the complainant in this case. Detective Skeet’s R. v. E. (B.) T.C. Semenuk Prov. J. 329

old police notebook has no probative value because it was not used to record any significant details of the original investigation. The “Synop- sis” in the Police Report adduced in evidence in the voir dire has no probative value. Prior to trial neither Detective Cenaiko nor Detective Skeet had ever seen this document. This was not the original PIMS Re- port prepared by Detective Skeet and attached to the original file. There is no evidence who created that document, when it was created, who put it into the CPS PIMS System or when. It is also a document that may contain misleading and highly prejudicial information relating to the ac- cused. For instance, the writer states, “The subject was interviewed at C.I.D. Office 90/03/12. He denied anything occurred with the victim, however his denials were not strong and the writers do not believe him.” If Detectives Cenaiko and Skeet did not believe the accused, one won- ders why charges were not laid. Detectives Cenaiko only had a vague recollection of the original investigation. Other than the above “Synop- sis” in the Police Report that he read prior to trial, Detective Skeet had no independent recollection of the details of the original investigation. Finally, as I stated in the above, the handwritten notes retrieved by the complainant on her request from AFSS pursuant to the Privacy Act, have no probative value, and could not be used by Defence Counsel to con- duct any meaningful cross-examination of any witness called at trial. 140 In my view, actual prejudice has been established in this case. Absent the original file, the accused cannot receive a fair trial. 141 This is one of those “clearest of cases” where a judicial stay of pro- ceedings ought to be granted. 142 Pursuant to section 24(1) of the Charter, a stay of proceedings is entered. Application granted; stay of proceedings entered. 330 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[Indexed as: Condominium Corp. No. 052 0580 v. Alberta (Human Rights Commission)] Condominium Corporation No. 052 0580, Applicant and Alberta Human Rights Commission, Respondent Alberta Court of Queen’s Bench Docket: Edmonton 1503-01401 2016 ABQB 183 Robert A. Graesser J. Heard: March 3, 2016 Judgment: March 24, 2016 Human rights –––– Practice and procedure — Commissions, tribunals and boards of inquiry — Jurisdiction — General principles –––– Owner of unit was disabled and confined to wheelchair — He had been assigned parking stall closest to elevator — In 2014, condominium corporation assigned different parking stall to owner — Owner filed complaint of discrimination against corpo- ration with Alberta Human Rights Commission (“Commission”) — Commission decided to proceed with investigation of complaint — Corporation brought ap- plication for judicial review — Corporation sought order quashing commis- sion’s decision to investigate — Application dismissed — Standard of review was reasonableness, since issue involved Commission’s home statute — Com- mission was ultimately being called on to determine whether assigning or taking away parking stall was “service customarily available to the public” and whether prohibited discrimination occurred in provision of that service to owner — There was nobody more capable of determining what was “discrimination” in context of human rights than Commission — Decisions regarding “services cus- tomarily available to the public” were also part of Commission’s bread and but- ter — Determinations of these questions were not matters that transcended to questions of general importance to legal system — Jurisdictional issue was not considered to be premature since resources would be wasted if Commission pur- sued investigation over which it had no jurisdiction — Commission’s decision that it had jurisdiction over owner’s complaint was reasonable — Corporation provided no authorities that directly supported its position — There was nothing in Condominium Property Act to oust jurisdiction of Commission — Fact that s. 5 of Alberta Human Rights Act specifically applied to tenants did not mean con- dominium unit owners were inferentially excluded from application of that Act — This was situation where there was likely concurrent jurisdiction. Real property –––– Condominiums — Miscellaneous –––– Human rights is- sues — Owner of unit was disabled and confined to wheelchair — He had been Condominium Corp. No. 052 0580 v. Alberta 331

assigned parking stall closest to elevator — In 2014, condominium corporation assigned different parking stall to owner — Owner filed complaint of discrimi- nation against corporation with Alberta Human Rights Commission (“Commis- sion”) — Commission decided to proceed with investigation of complaint — Corporation brought application for judicial review — Corporation sought order quashing commission’s decision to investigate — Application dismissed — Commission’s decision that it had jurisdiction over owner’s complaint was rea- sonable — Oppression provision in s. 67 of Condominium Property Act was broad enough to encompass civil claim for discrimination, but it was difficult and expensive process — There was nothing in Act to oust jurisdiction of Com- mission — This was situation where there was likely concurrent jurisdiction — Fact that s. 5 of Alberta Human Rights Act specifically applied to tenants did not mean condominium unit owners were inferentially excluded from applica- tion of that Act. Cases considered by Robert A. Graesser J.: A.T.A. v. Alberta (Information & Privacy Commissioner) (2011), 2011 SCC 61, 2011 CarswellAlta 2068, 2011 CarswellAlta 2069, 339 D.L.R. (4th) 428, 28 Admin. L.R. (5th) 177, 52 Alta. L.R. (5th) 1, [2012] 2 W.W.R. 434, (sub nom. Alberta Teachers’ Association v. Information & Privacy Commissioner (Alta.)) 424 N.R. 70, (sub nom. Alberta (Information & Privacy Commissioner) v. Alberta Teachers’ Association) [2011] 3 S.C.R. 654, [2011] S.C.J. No. 61, (sub nom. Alberta Teachers’ Association v. Information and Privacy Commissioner) 519 A.R. 1, (sub nom. Alberta Teachers’ Association v. Information and Privacy Commissioner) 539 W.A.C. 1 (S.C.C.) — referred to Assn. of Professional Engineers and Geoscientists of Alberta v. Mihaly (2016), 2016 ABQB 61, 2016 CarswellAlta 106 (Alta. Q.B.) — referred to Berg v. University of British Columbia (1993), 13 Admin. L.R. (2d) 141, 79 B.C.L.R. (2d) 273, (sub nom. University of British Columbia v. Berg) 152 N.R. 99, (sub nom. University of British Columbia v. Berg) [1993] 2 S.C.R. 353, (sub nom. University of British Columbia v. Berg) 26 B.C.A.C. 241, (sub nom. University of British Columbia v. Berg) 44 W.A.C. 241, (sub nom. University of British Columbia v. Berg) 102 D.L.R. (4th) 665, (sub nom. University of British Columbia v. Berg) 18 C.H.R.R. D/310, 1993 Car- swellBC 133, 1993 CarswellBC 1261, [1993] S.C.J. No. 55, EYB 1993- 67103 (S.C.C.) — considered C.B. Powell Ltd. c. Canada (Agence des services frontaliers) (2010), 2010 FCA 61, 2010 CarswellNat 391, 2010 CAF 61, 2010 CarswellNat 1197, (sub nom. Powell (C.B.) Ltd. v. Canada Border Services Agency (President)) 400 N.R. 367, [2010] F.C.J. No. 274, [2011] 2 F.C.R. 332 (F.C.A.) — referred to Canada (House of Commons) v. Vaid (2005), 2005 SCC 30, 2005 CarswellNat 1272, 2005 CarswellNat 1273, [2005] S.C.J. No. 28, 2005 C.L.L.C. 230-016, 41 C.C.E.L. (3d) 1, 252 D.L.R. (4th) 529, 333 N.R. 314, 28 Admin. L.R. 332 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

(4th) 1, EYB 2005-90618, [2005] 1 S.C.R. 667, 135 C.R.R. (2d) 189, 2005 CSC 30, 52 C.H.R.R. D/294 (S.C.C.) — referred to Condominium Plan 7722911 v. Marnel (2008), 2008 ABQB 195, 2008 CarswellAlta 362, 69 R.P.R. (4th) 132 (Alta. Q.B.) — referred to Condominium Plan No. 022 1347 v. Y. (N.) (2003), 2003 ABQB 790, 2003 CarswellAlta 1408, 13 R.P.R. (4th) 185, 22 Alta. L.R. (4th) 166, 351 A.R. 76, [2003] A.J. No. 1227 (Alta. Q.B.) — referred to Condominium Plan No. 8210034 v. King (2012), 2012 ABQB 127, 2012 CarswellAlta 413, (sub nom. Owners-Condominium Plan No. 8120034 v. King) 534 A.R. 161, 75 Alta. L.R. (5th) 154 (Alta. Master) — referred to Condominium Plan No. 931 0520 v. Smith (1999), 1999 CarswellAlta 119, 24 R.P.R. (3d) 76, (sub nom. Owners-Condominium Plan No. 931 0520 v. Smith) 239 A.R. 319, [1999] A.J. No. 149, 1999 ABQB 119 (Alta. Q.B.) — referred to Condominium Plan No. 9422336 v. R. (2004), 2004 TCC 406, 2004 CarswellNat 1768, 2004 G.T.C. 351, [2004] G.S.T.C. 77, 2004 CCI 406, 2004 Car- swellNat 5720 (T.C.C. [Informal Procedure]) — referred to Condominium Plan No. 9524710 v. Webb (1999), 236 A.R. 364, 1999 Carswell- Alta 826, 32 R.P.R. (3d) 185, [1999] A.J. No. 10, 1999 ABQB 7 (Alta. Q.B.) — referred to Condominium Plan No. 982 2595 v. Fantasy Homes Ltd. (2008), 2008 ABQB 584, 2008 CarswellAlta 1296 (Alta. Q.B.) — referred to Condominium Plan No. 9910225 v. Davis (2013), 2013 ABQB 49, 2013 CarswellAlta 122, 29 R.P.R. (5th) 210, 78 Alta. L.R. (5th) 233, 555 A.R. 156 (Alta. Q.B.) — referred to Epp v. Strata Plan VR2692 (2009), 2009 BCHRT 97, 2009 CarswellBC 620, 67 C.H.R.R. D/116 (B.C. Human Rights Trib.) — referred to Francis v. Condominium Plan No. 8222909 (2003), 2003 ABCA 234, 2003 CarswellAlta 1092, 11 R.P.R. (4th) 161, [2003] 11 W.W.R. 469, 330 A.R. 297, 299 W.A.C. 297, 19 Alta. L.R. (4th) 263, [2003] A.J. No. 976 (Alta. C.A.) — referred to Ganser v. Rosewood Estates Condominium Corp. (2002), 42 C.H.R.R. D/264, 2002 CarswellAlta 1817, 2002 AHRC 2 (Alta. Human Rights Bd. of In- quiry) — considered Gay Alliance Toward Equality v. Vancouver Sun (1979), 10 B.C.L.R. 257, 97 D.L.R. (3d) 577, [1979] 4 W.W.R. 118, [1979] 2 S.C.R. 435, 27 N.R. 117, 1979 CarswellBC 759, 1979 CarswellBC 35 (S.C.C.) — considered Halifax (Regional Municipality) v. Nova Scotia (Human Rights Commission) (2012), 2012 SCC 10, 2012 CarswellNS 124, 2012 CarswellNS 125, 31 Ad- min. L.R. (5th) 179, 94 M.P.L.R. (4th) 1, 343 D.L.R. (4th) 385, 428 N.R. 107, [2012] S.C.J. No. 10, 316 N.S.R. (2d) 1, [2012] A.C.S. No. 10, [2012] 1 S.C.R. 364, 74 C.H.R.R. D/7 (S.C.C.) — referred to Condominium Corp. No. 052 0580 v. Alberta 333

Harelkin v. University of Regina (1979), [1979] 2 S.C.R. 561, [1979] 3 W.W.R. 676, 26 N.R. 364, 96 D.L.R. (3d) 14, 1979 CarswellSask 79, 1979 Carswell- Sask 162, [1979] S.C.J. No. 59 (S.C.C.) — referred to Hnatiuk v. Condominium Corp. No. 032 2411 (2014), 2014 ABQB 22, 2014 CarswellAlta 30 (Alta. Q.B.) — referred to Konieczna v. Strata Plan NW 2489 (2003), 47 C.H.R.R. D/144, 2003 BCHRT 10, 2003 CarswellBC 3465 (B.C. Human Rights Trib.) — referred to Leeson v. Condominium Plan No. 9925923 (2014), 2014 ABQB 20, 2014 CarswellAlta 35, 581 A.R. 364, 8 Alta. L.R. (6th) 75 (Alta. Q.B.) — referred to Leon’s Furniture Ltd. v. Alberta (Information & Privacy Commissioner) (2011), 2011 ABCA 94, 2011 CarswellAlta 453, 22 Admin. L.R. (5th) 11, 45 Alta. L.R. (5th) 1, [2011] 9 W.W.R. 668, 502 A.R. 110, 517 W.A.C. 110, [2011] A.J. No. 338 (Alta. C.A.) — referred to Litchfield v. College of Physicians & Surgeons (Alberta) (2005), 2005 ABQB 962, 2005 CarswellAlta 1905, 57 Alta. L.R. (4th) 134, 42 Admin. L.R. (4th) 165, 390 A.R. 126, [2005] A.J. No. 1771 (Alta. Q.B.) — referred to Luka v. Lockerbie & Hole Industrial Inc. (2011), 2011 ABCA 3, 2011 Carswell- Alta 9, 2011 C.L.L.C. 230-008, 329 D.L.R. (4th) 76, 16 Admin. L.R. (5th) 255, [2011] 6 W.W.R. 70, 39 Alta. L.R. (5th) 236, 493 A.R. 295, 502 W.A.C. 295 (Alta. C.A.) — referred to Mahoney v. Strata Plan NW 332 (2008), 2008 BCHRT 274, 63 C.H.R.R. D/283, 2008 CarswellBC 3199 (B.C. Human Rights Trib.) — referred to McCormick v. Fasken Martineau Dumoulin LLP (2014), 2014 SCC 39, 2014 CSC 39, 2014 CarswellBC 1358, 2014 CarswellBC 1359, 371 D.L.R. (4th) 246, [2014] 7 W.W.R. 209, 67 Admin. L.R. (5th) 177, 57 B.C.L.R. (5th) 1, 2014 C.L.L.C. 230-024, 15 C.C.E.L. (4th) 1, 22 B.L.R. (5th) 1, (sub nom. Fasken Martineau Dumoulin LLP v. Human Rights Tribunal (B.C.)) 458 N.R. 38, [2014] S.C.J. No. 39, [2014] A.C.S. No. 39, [2014] 2 S.C.R. 108, 79 C.H.R.R. D/178 (S.C.C.) — referred to Mis v. Alberta (Human Rights & Citizenship Commission) (2001), 2001 ABCA 212, 2001 CarswellAlta 1122, 27 C.C.P.B. 262, 293 A.R. 391, 257 W.A.C. 391, [2001] A.J. No. 1094 (Alta. C.A.) — referred to Placer Dome Canada Ltd. v. Ontario (Minister of Finance) (2006), 2006 SCC 20, 2006 CarswellOnt 3112, 2006 CarswellOnt 3113, (sub nom. Ontario (Minister of Finance) v. Placer Dome Canada Limited) 266 D.L.R. (4th) 513, 348 N.R. 148, 210 O.A.C. 342, 2006 D.T.C. 6532 (Eng.), [2006] 1 S.C.R. 715, [2006] S.C.J. No. 20 (S.C.C.) — referred to Robertson v. Edmonton (City) Police Service (2003), 2003 ABCA 279, 2003 CarswellAlta 1402, 339 A.R. 169, 312 W.A.C. 169, 8 Admin. L.R. (4th) 215, 43 C.P.C. (5th) 229, 28 Alta. L.R. (4th) 226, [2003] A.J. No. 1213 (Alta. C.A.) — referred to 334 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

SMS Equipment Inc. v. CEP, Local 707 (2015), 2015 ABQB 162, 2015 CarswellAlta 385, (sub nom. SMS Equipment Inc. v. Communications, Energy and Paperworkers Union, Local 707) 2015 C.L.L.C. 220-034, 254 L.A.C. (4th) 34, [2015] 8 W.W.R. 779, 87 Admin. L.R. (5th) 267, [2015] A.J. No. 272, 18 Alta. L.R. (6th) 74 (Alta. Q.B.) — referred to Shannon v. Strata Plan KAS 1613 (2009), 2009 BCHRT 438, 2009 CarswellBC 3530, 69 C.H.R.R. D/43 (B.C. Human Rights Trib.) — referred to Strickland v. Canada (Attorney General) (2015), 2015 SCC 37, 2015 CSC 37, 2015 CarswellNat 2457, 2015 CarswellNat 2458, 386 D.L.R. (4th) 1, 87 Ad- min. L.R. (5th) 60, 473 N.R. 328, [2015] 2 S.C.R. 713 (S.C.C.) — referred to Syncrude Canada Ltd. v. Alberta (Human Rights & Citizenship Commission) (2008), 2008 ABCA 217, 2008 CarswellAlta 733, 70 Admin. L.R. (4th) 302, 90 Alta. L.R. (4th) 1, 2008 C.L.L.C. 230-029, 432 A.R. 333, 424 W.A.C. 333, 63 C.H.R.R. D/184 (Alta. C.A.) — referred to Syndicat Northcrest c. Amselem (2004), 2004 SCC 47, 2004 CarswellQue 1543, 2004 CarswellQue 1544, 323 N.R. 59, (sub nom. Syndicat Northcrest v. Am- selem) 241 D.L.R. (4th) 1, [2004] S.C.J. No. 46, [2004] 2 S.C.R. 551, 121 C.R.R. (2d) 189, REJB 2004-66513, 28 R.P.R. (4th) 1, 2004 CSC 47 (S.C.C.) — referred to Williams v. Strata Plan LMS 768 (2003), 2003 BCHRT 17, (sub nom. Williams v. Strata Council No. 768) 46 C.H.R.R. D/326, 2003 CarswellBC 3486 (B.C. Human Rights Trib.) — referred to 934859 Alberta Inc. v. Condominium Corp. No. 0312180 (2007), 2007 ABQB 640, 2007 CarswellAlta 1518, 62 R.P.R. (4th) 207, 83 Alta. L.R. (4th) 67, [2008] 3 W.W.R. 333, 434 A.R. 41 (Alta. Q.B.) — referred to Statutes considered: Alberta Human Rights Act, R.S.A. 2000, c. A-25.5 Generally — referred to s. 4 — referred to s. 5 — considered Condominium Property Act, R.S.A. 2000, c. C-22 Generally — referred to s. 67 — referred to s. 67(1)(a) — considered Human Rights, Citizenship and Multiculturalism Act, R.S.A. 1980, c. H-11.7 s. 3 — considered Residential Tenancies Act, S.A. 2004, c. R-17.1 Generally — referred to

APPLICATION brought by condominium corporation for judicial review of Al- berta Human Rights Commission decision to proceed with investigation of com- plaint made by one of owners of condominium corporation. Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 335

Roberto Noce, Q.C., for Applicant Terri Susan Zurbrigg, for Respondent

Robert A. Graesser J.: Introduction 1 Condominium Corporation No. 052 0580 (the Corporation) brings this application for judicial review as a result of a decision of the Alberta Human Rights Commission (the Commission) to proceed with the inves- tigation of a complaint made by one of the owners of the Corporation. 2 The Corporation seeks to quash the decision and essentially prohibit the Commission from investigating the complaint or otherwise dealing with it. 3 The Corporation argues that the Commission has no jurisdiction to deal with complaints by owners of condominiums against the Corporation.

Background 4 Dennis Goldsack purchased a unit in the Tradition at Southbrook ap- proximately ten years ago. As a result, he was assigned a parking stall and owns a fractional share of the common property of the Corporation. He is also a member of the Corporation, entitling him to vote at meetings and to all the rights (and obligations) of an owner. 5 Mr. Goldsack is disabled and confined to a wheelchair. He alleges that when he purchased his unit, the developer who then ran the Corpora- tion assigned him the parking stall nearest the elevator in the building. Mr. Goldsack believes that the stall is a designated “handicapped” stall, although that characterization is apparently controversial. 6 Sometime in 2014, the Corporation Board decided to change the use of the stall being used by Mr. Goldsack to bicycle parking and storage for the residents, and notified Mr. Goldsack that he would no longer be able to use the stall. As a result, he would have to park in the stall as- signed to his unit, which was narrower and further from the elevator. 7 Mr. Goldsack’s approaches to the management company and to the Board have not succeeded in having the Board change its position so on September 9, 2014 he made a complaint of discrimination to the Com- mission based on physical disability. 8 The Commission reviewed his complaint and wrote the Corporation seeking its response. Mr. Noce responded for the Corporation by letter 336 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

dated October 10, 2014 advising that the Corporation’s position was that the Commission had no jurisdiction over it. The Commission reviewed Mr. Noce’s letter and Garth Borle, the Commission’s Assistant Regional Director, responded that it believed that it had jurisdiction to investigate the complaint. A copy of Ganser v. Rosewood Estates Condominium Corp., 2002 AHRC 2 (Alta. Human Rights Bd. of Inquiry) was sent to Mr. Noce. 9 This application was then brought, seeking to quash the Commis- sion’s decision to proceed with the investigation.

Issues 10 The issue on this application is straightforward: Does the Commis- sion have jurisdiction over complaints made to it by owners of condo- minium corporations concerning the actions of the condominium corpo- ration affecting the complainant? 11 The Corporation argues that case law in Alberta makes it clear that there is no such jurisdiction, and it argues that there is no need for the Commission to be involved because the Condominium Property Act, RSA 2000, c C-22, provides adequate remedies for owners unhappy with their treatment by the Corporation. 12 The Commission argues that the Courts should not intervene with the Commission’s processes at this stage of the proceeding. It also made sub- missions with respect to the standard of review to be used on this appli- cation. It also argues that it has threshold jurisdiction to investigate a complaint made to the Commission.

Case Law 13 The starting point is Ganser v. Rosewood Estates Condominium Corp., a 2002 decision of the Alberta Human Rights Commission. In that case, the Commission ruled that it had jurisdiction with respect to the activities of condominium corporations. 14 That was a case involving Section 3 of the Human Rights, Citizenship and Multiculturalism Act, RSA 1980, c H-11.7 (now essentially Section 4 of the Alberta Human Rights Act, RSA 2000 c A-25.5 (the Act)), fol- lowing an allegation that discrimination occurred in relation to services “customarily available to the public” by the condominium corporation against an owner. The Commission considered Berg v. University of Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 337

British Columbia, [1993] 2 S.C.R. 353 (S.C.C.) and held at pages 14 and 15: Chief Justice Lamer in Berg considered the private and public nature of relationships and expanded the definition of ‘public’. He rejected a quantitative approach taken in the courts in a line of cases Gay Alli- ance Toward Equality v. Vancouver Sun (1976) 2 S.C.R. 435. He applied a relationship approach. He says, that “every service has its own public” and once this ‘public’ is defined, the Act prohibits dis- crimination against the members of that public on the prohibited grounds. The Respondent provides a variety of services to the owners of pro- perty in the condominium complex, therefore, according to Berg, the owners make up the public to whom the services are ‘customarily available’. One of the services provided by the Respondent is in rela- tionship to parking. Parking is customarily available to owners. A more specific subset of parking services is the assignment of parking stalls. Pursuant to By-Law 58(h), the Board of the Corporation has full discretion in assigning and re-assigning parking stalls. It is a finding of this Panel that the Complainant, a resident owner, is therefore a member of the public customarily served by the Respon- dent as a consequence of her purchase of her unit in the condomin- ium complex in 1991. Parking and more specifically the assignment of parking stalls are incidents of this public relationship between the Respondent and the Complainant. In fact, being a resident owner, ac- cording to the By-laws is a primary condition of the assignment of a parking stall. The Complainant is a member of the ‘parking public’. She had been assigned parking stall #39 from 1991 when she pur- chased her unit in the complex to the change in the By-Law in De- cember 1998. She is not being assigned a parking stall now because of the secondary criteria defined in the By-Law. It is the Panel’s view that she remains a member of the public for the purposes of review- ing if there has been discrimination against her as a result of the sec- ondary conditions. 15 The Corporation notes that Ganser was not appealed, and argues that it is not binding and should not be followed. 16 The Corporation submitted a number of cases as to the standard of review, the jurisdiction of the Commission and the availability of what it describes as the “correct forum” to deal with allegedly improper conduct by condominium corporations or boards with respect to owners: 1. Luka v. Lockerbie & Hole Industrial Inc., 2011 ABCA 3 (Alta. C.A.); 338 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

2. Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715 (S.C.C.), para 45 Driedger on the Construc- tion of Statutes (3rd ed, 1994); 3. Condominium Property Act, RSA 2000, c C-22, s. 67; 4. Residential Tenancies Act, SA 2004, c R-17.1; 5. Berg v. University of British Columbia, [1993] 2 S.C.R. 353 (S.C.C.); 6. Condominium Plan No. 9422336 v. R., 2004 TCC 406 (T.C.C. [Informal Procedure]); 7. Condominium Plan No. 931 0520 v. Smith, 1999 ABQB 119 (Alta. Q.B.); 8. Condominium Plan No. 9910225 v. Davis, 2013 ABQB 49 (Alta. Q.B.); 9. Condominium Plan 7722911 v. Marnel, 2008 ABQB 195 (Alta. Q.B.). 17 The Commission submitted a number of cases as to its jurisdiction, as well as cases on the standard of review and its argument that the Court should decline to intervene at this stage of the proceedings: 1. Alberta Human Rights Act, RSA 2000, c. A-25.5 (applicable sec- tions only); 2. Ganser v. Rosewood Estates Condominium Corp., 2002 AHRC 2 (Alta. Human Rights Bd. of Inquiry); 3. Leon’s Furniture Ltd. v. Alberta (Information & Privacy Commis- sioner), 2011 ABCA 94, 502 A.R. 110 (Alta. C.A.); 4. Strickland v. Canada (Attorney General), 2015 SCC 37, [2015] 2 S.C.R. 713 (S.C.C.); 5. Harelkin v. University of Regina, [1979] 2 S.C.R. 561 (S.C.C.); 6. Halifax (Regional Municipality) v. Nova Scotia (Human Rights Commission), 2012 SCC 10, [2012] 1 S.C.R. 364 (S.C.C.); 7. Litchfield v. College of Physicians & Surgeons (Alberta), 2005 ABQB 962, 390 A.R. 126 (Alta. Q.B.); 8. C.B. Powell Ltd. c. Canada (Agence des services frontaliers), 2010 FCA 61 (F.C.A.) at para. 28, (2010), 400 N.R. 367 (F.C.A.); 9. Robertson v. Edmonton (City) Police Service, 2003 ABCA 279, 339 A.R. 169 (Alta. C.A.); Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 339

10. Canada (House of Commons) v. Vaid, 2005 SCC 30, [2005] 1 S.C.R. 667 (S.C.C.); 11. Syncrude Canada Ltd. v. Alberta (Human Rights & Citizenship Commission), 2008 ABCA 217, 432 A.R. 333 (Alta. C.A.); 12. Assn. of Professional Engineers and Geoscientists of Alberta v. Mihaly, 2016 ABQB 61 (Alta. Q.B.); 13. Mis v. Alberta (Human Rights & Citizenship Commission), 2001 ABCA 212, 293 A.R. 391 (Alta. C.A.); 14. Konieczna v. Strata Plan NW 2489 (2003), 47 C.H.R.R. D/144, 2003 BCHRT 10 (B.C. Human Rights Trib.); 15. Williams v. Strata Plan LMS 768 (2003), 46 C.H.R.R. D/326, 2003 BCHRT 17 (B.C. Human Rights Trib.); 16. Mahoney v. Strata Plan NW 332 (2008), 63 C.H.R.R. D/283, 2008 BCHRT 274 (B.C. Human Rights Trib.); 17. Epp v. Strata Plan VR2692 (2009), 67 C.H.R.R. D/116, 2009 BCHRT 97 (B.C. Human Rights Trib.); 18. Shannon v. Strata Plan KAS 1613 (2009), 69 C.H.R.R. D/43, 2009 BCHRT 438 (B.C. Human Rights Trib.); 19. Syndicat Northcrest c. Amselem, 2004 SCC 47, [2004] 2 S.C.R. 551 (S.C.C.). 18 Following argument on March 3, 2016 the Commission cited two ad- ditional cases: A.T.A. v. Alberta (Information & Privacy Commissioner), 2011 SCC 61 (S.C.C.); and SMS Equipment Inc. v. CEP, Local 707, 2015 ABQB 162 (Alta. Q.B.). 19 The Corporation responded with a supplemental brief, citing a num- ber of additional authorities: 1. Condominium Property Act, RSA 2000, c C-22; 2. Hnatiuk v. Condominium Corp. No. 032 2411, 2014 ABQB 22 (Alta. Q.B.); 3. Condominium Plan No. 9524710 v. Webb, 1999 ABQB 7 (Alta. Q.B.); 4. Condominium Plan No. 022 1347 v. Y. (N.), 2003 ABQB 790 (Alta. Q.B.); 340 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

5. Francis v. Condominium Plan No. 8222909, 2003 ABCA 234 (Alta. C.A.); 6. Condominium Plan No. 8210034 v. King, 2012 ABQB 127 (Alta. Master); 7. 934859 Alberta Inc. v. Condominium Corp. No. 0312180, 2007 ABQB 640 (Alta. Q.B.); 8. Condominium Plan 7722911 v. Marnel, 2008 ABQB 195 (Alta. Q.B.); 9. Condominium Plan No. 982 2595 v. Fantasy Homes Ltd., 2008 ABQB 584 (Alta. Q.B.); 10. Leeson v. Condominium Plan No. 9925923, 2014 ABQB 20 (Alta. Q.B.); 11. Condominium Complexes are Private; a Defense Against the creeping expansion of the Alberta Human Rights Commission; 12. McCormick v. Fasken Martineau Dumoulin LLP, 2014 SCC 39 (S.C.C.).

Arguments Corporation 20 The Corporation submits that the standard of review is correctness. 21 The Corporation argues that Ganser v. Rosewood Estates Condominium Corp. should not be followed, citing the fact that the Act does not apply to single detached homeowners. 22 Section 5 prohibits discrimination against tenants: 5 No person shall (a) deny to any person or class of persons the right to occupy as a tenant any commercial unit or self contained dwelling unit that is advertised or otherwise in any way represented as be- ing available for occupancy by a tenant, or (b) discriminate against any person or class of persons with re- spect to any term or condition of the tenancy of any commer- cial unit or self contained dwelling unit, because of the race, religious beliefs, colour, gender, gender identity, gender expression, physical disability, mental disability, ancestry, place of origin, marital status, source of income, family status or sex- ual orientation of that person or class of persons or of any other per- son or class of persons. Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 341

23 The Corporation argues that section 5 protects tenants and inferen- tially excludes residents who are property owners. 24 It argues that if Section 4 of the Act were intended to protect condo- minium unit owners, “then the wording of Section 4 would equally pro- tect tenants”. 25 Section 4 provides: 4 No person shall (a) deny to any person or class of persons any goods, services, accommodation or facilities that are customarily available to the public, or (b) discriminate against any person or class of persons with re- spect to any goods, services, accommodation or facilities that are customarily available to the public, because of the race, religious beliefs, colour, gender, gender identity, gender expression, physical disability, mental disability, ancestry, place of origin, marital status, source of income, family status or sex- ual orientation of that person or class of persons or of any other per- son or class of persons. 26 The Corporation argues that the Commission’s interpretation of Sec- tion 4 leads to a redundancy within the Act, and offends the presumption against tautology, citing Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715 (S.C.C.). 27 The Corporation argues that no void is left if the Commission is with- out jurisdiction, as the Condominium Property Act provides appropriate and sufficient remedies in section 67: 67(1) In this section, (a) “improper conduct” means (i) non-compliance with this Act, the regulations or the bylaws by a developer, a corporation, an employee of a corporation, a member of a board or an owner, (ii) the conduct of the business affairs of a corporation in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of an interested party, (iii) the exercise of the powers of the board in a manner that is oppressive or unfairly prejudicial to or that un- fairly disregards the interests of an interested party, (iv) the conduct of the business affairs of a developer in a manner that is oppressive or unfairly prejudicial to or 342 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

that unfairly disregards the interests of an interested party or a purchaser or a prospective purchaser of a unit, or (v) the exercise of the powers of the board by a developer in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of an inter- ested party or a purchaser or a prospective purchaser of a unit; (b) “interested party” means an owner, a corporation, a member of the board, a registered mortgagee or any other person who has a registered interest in a unit. (2) Where on an application by an interested party the Court is satis- fied that improper conduct has taken place, the Court may do one or more of the following: (a) direct that an investigator be appointed to review the im- proper conduct and report to the Court; (b) direct that the person carrying on the improper conduct cease carrying on the improper conduct; (c) give directions as to how matters are to be carried out so that the improper conduct will not reoccur or continue; (d) if the applicant suffered loss due to the improper conduct, award compensation to the applicant in respect of that loss; (e) award costs; (f) give any other directions or make any other order that the Court considers appropriate in the circumstances. (3) The Court may grant interim relief under subsection (2) pending the final determination of the matter by the Court. 28 The Corporation also argues that the decision of the Commission to proceed to investigate under the provisions of section 4 offended the “re- lational approach” to human rights protection as set out in Berg v. University of British Columbia, [1993] 2 S.C.R. 353 (S.C.C.). 29 It argues that a condominium corporation does not provide “services” to owners as they are “a mechanism by which groups of property owners manage their collective resources”. It cites the analysis in Condominium Plan No. 9422336 v. R., 2004 TCC 406 (T.C.C. [Informal Procedure]). 30 Further, the Corporation argues that the issue has been decided by the Court of Queen’s Condominium Plan No. 931 0520 v. Smith, 1999 ABQB 119 (Alta. Q.B.) and Condominium Plan No. 9910225 v. Davis, 2013 ABQB 49 (Alta. Q.B.). Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 343

31 In Condominium Plan No. 9910225 v. Davis, Stevens J held at para 9: [9] Because condominium By-laws are in the nature of a contract between the owners of the units of the condominium, and because the Canadian Charter of Rights and Freedoms does not extend to “activi- ties by non-governmental entities created by government for legally facilitating private individuals do things of their own choosing with- out engaging governmental responsibility”, the by-laws of the condo- minium corporation are not bound by the Charter: Condominium Plan No. 9310520, at para.5. Nor, as Hawco J. concluded at para.6, are they governed by s.4 the Alberta Human Rights Act, R.S.A. 2000, c.A-25.5, because that section prohibits discrimination against any person or class of person with respect of accommodation or fa- cilities that are customarily available to the public, and of course con- dominium units are not. It is not at all uncommon, for example, for condominium By-laws to discriminate on the basis of age, and it is well established that a condominium corporation is legally entitled to do so. 32 Next, the Corporation argues that deference should be given to the democratic decisions of an elected condominium corporation board, cit- ing Condominium Plan 7722911 v. Marnel, 2008 ABQB 195 (Alta. Q.B.). 33 Finally, the Corporation argues that a decision favourable to the com- mission as to its jurisdiction over condominium corporations would open a floodgate of complaints.

Commission 34 No issues were raised with the Commission’s standing to make the submissions it did on this application. 35 The Commission submits that the standard of review is reasonableness. 36 The Commission also argues that the decision of Mr. Borle to pro- ceed with an investigation into Mr. Goldsack’s complaint is not one that can be reviewed by way of judicial review as it was not a final determi- nation and was a matter of “screening and administration, not of adjudi- cation”, citing Halifax (Regional Municipality) v. Nova Scotia (Human Rights Commission), 2012 SCC 10 (S.C.C.). 37 Its main argument was that the application brought by the Corpora- tion is premature, and that the Corporation should have waited for a deci- sion on the merits of the matter rather than bring this pre-emptive strike against the Commission’s threshold jurisdiction. 344 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

38 The Commission notes that judicial review is ultimately discretionary in nature, citing Strickland v. Canada (Attorney General) and argues that: 1. Human rights legislation sets up a complete regime for the deter- mination of human rights complaints; 2. The Act contains an adequate and effective remedy in the form of a hearing before a tribunal and a statutory appeal; 3. Human rights tribunals have specialized expertise in the resolution and adjudication of human rights complaints; 4. Early judicial intervention would disrupt and fragment the statu- tory regime; and 5. The common law “overwhelmingly supports dismissing this appli- cation on the basis of it being premature”.

Standard of Review 39 I am satisfied that the standard of review on this application is reason- ableness. Mr. Borle (who is not the Commissioner) was considering an issue involving only the Commission’s home statute. 40 As recently held in Assn. of Professional Engineers and Geoscientists of Alberta v. Mihaly, 2016 ABQB 61 (Alta. Q.B.), questions of law con- cerning the interpretation of the Act are to be reviewed on the basis of reasonableness unless they either involve an issue of “central importance to the legal system” or fall outside the adjudicator’s specialized area of expertise. 41 Ross J held at para 47 - 49 in that case: [47] With the release of Saguenay, Bombardier and Stewart, many of the previously contentious issues regarding standard of review were conceded by the parties. The governing standards of review are set out below. [48] Questions of procedural fairness are reviewed on the basis of whether the proceedings met the level of fairness required by law: Wright v College and Association of Registered Nurses of Alberta (Appeals Committee), 2012 ABCA 267 (CanLII) at para 31, 355 DLR (4th) 197 [Wright]. [49] Questions of law concerning the interpretation of the Alberta Human Rights Act, RSA 2000, c A-25.5 [AHRA] are reviewed for reasonableness, unless they are “of central importance to the legal system and fall outside the adjudicator’s specialized area of exper- tise”: Saguenay at paras 46-48. Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 345

42 The Corporation cites Luka v. Lockerbie & Hole Industrial Inc. as authority for its argument that questions of law before the Commission are to be reviewed on the basis of correctness. However, that decision makes it clear that the interpretation of the word “employer” was an ex- tricable question of law and that the determination of who is an employer “is a question of general importance to the legal system and outside the specialized area of expertise of the Panel” (at para 8). 43 Here, the Commission is ultimately being called on to determine whether or not the assignment or taking away of an assigned parking stall is a “service customarily available to the public” and whether prohibited discrimination occurred in the provision of that service to an owner. 44 There is no body more capable of determining what is “discrimina- tion” in the context of human rights than the Commission. Decisions as to what are “services customarily available to the public” may be are also part of their bread and butter. 45 I do not see that determinations on these questions are matters that transcend to questions “of general importance to the legal system”. These are human rights issues and well within the specialized expertise of that body. 46 As such, the decision of Mr. Borle, to the extent that it is a decision that can be reviewed on judicial review, should be reviewed on the basis of reasonableness.

Threshold Issues 47 One threshold issue here is whether Mr. Borle’s decision can be re- viewed at all because it is not adjudicative in nature and is not final. 48 The second threshold issue is the Commission’s position that the Court should decline to exercise a jurisdiction to review the decision at this stage on the basis of it being premature. 49 The Commission makes a very strong argument that the Court should hold off any review until the process has been allowed to run its course. Canada (House of Commons) v. Vaid, 2005 SCC 30 (S.C.C.), strongly supports the Commission’s arguments in that regard. 50 The position taken by the Corporation, that the Commission has no jurisdiction to even embark on an investigation of a complaint by an owner about the actions of the condominium corporation of which he is a part owner, is one that might have been brought by way of an application 346 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

for prohibition rather than for judicial review of an administrative decision. 51 I am going to proceed to a review on the merits of the application on two bases: firstly, that there is some benefit to having an issue deter- mined on its merits rather than get tangled in procedural issues. In that regard, I am mindful of the foundational provisions in the Rules of Court which encourage, if not require, the parties to identify the real issues in dispute at an early stage and find a way of adjudicating those issues eco- nomically and expediently. Sending the Corporation away to bring a pro- hibition application instead of a judicial review application does not ac- complish those objectives. 52 Secondly, this application for judicial review was directed to be heard by Browne J on the first return of the application over a year ago. It has taken a year for this application to be scheduled to be heard, not because of any delays by the parties but rather because of the institutional delay in getting an application for judicial review heard in the Court of Queen’s Bench. 53 I recognize that Browne J made no determination on the application before her other than whether Mr. Goldsack was to be given notice of the application and, if so, how he was to be notified, as well as on the Corpo- ration’s application for a stay of proceedings before the Commission. Browne J ruled that Mr. Goldsack should continue to have access to the handicapped stall until the matter had been heard. The judicial review application itself was presented as a consent adjournment. 54 I do not accept that Browne J made any determination that the matter should be heard on its merits. There were no technical arguments made before her. However, the first notice given to the Corporation of the Commission’s intention to raise these threshold issues was in its brief, filed February 19, 2016. 55 I note that counsel for the Commission is newly appointed, and was not counsel who appeared before Browne J or who had conduct of the matter until recently. But it seems to me that having regard to the delay in scheduling this matter for a hearing, there is utility in determining the Corporation’s threshold issue as to whether the Commission has any ju- risdiction to embark on an investigation of this nature. 56 While there are good arguments that the application is premature, there is also merit in determining this threshold issue. If indeed the Com- mission has no jurisdiction in matters such as this, it would be a waste of scarce government and court resources to proceed further, and would be Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 347

an unnecessary expense for the Corporation if it were required to respond to the complaint, continue to make jurisdiction arguments, and poten- tially proceed through the Commission’s processes to a hearing on the merits before it could get a court decision on threshold jurisdiction. 57 In the circumstances of this case, I consider it appropriate to exercise a discretion to consider the Corporation’s application.

Previous Queen’s Bench Decisions 58 The Corporation places great store on the two Queen’s Bench deci- sions in this area. In Condominium Plan No. 931 0520 v. Smith, Hawco J considered the jurisdiction of the Commission to hear a complaint under Section 3 of the old Act relating to “goods, services, accommodation or facilities that are customarily available to the public”. He specifically considered a provision in the bylaws prohibiting residents under the age of forty-five in the context of the son of a disabled resident-owner who required assistance. 59 Hawco J held at para 7: [7] I am satisfied that this section, insofar as it prohibits discrimina- tion with respect to “accommodation,” is not applicable in this case. Rather, it is applicable - as found in Gay Alliance v. Vancouver Sun (1979), 1979 CanLII 225 (SCC), 97 D.L.R. (3rd) 577 (S.C.C.) at 590, to such matters as accommodation in hotels, inns and motels. Even if “accommodation” can be read as including a condominium building or complex, it seems to me that Section 11.1 of the Human Rights Act covers this situation. As stated by Allen Co. Ct.J, in Borsodi: Further the declaration is in the nature of a private agreement among all of the owners of units in the condominium, including the defend- ants, for the joint and several benefit. The owners...are entitled to the protection of their contractual and property rights. If those rights are not protected they perceive, with cause, that their enjoyment of their property and thus their quality of life will be adversely affected. 60 And in Condominium Plan No. 9910225 v. Davis, Stevens J consid- ered a provision in the bylaws that arguably prohibited a live-in caregiver for disabled resident-owners. He held at para 9: [9] Because condominium By-laws are in the nature of a contract between the owners of the units of the condominium, and because the Canadian Charter of Rights and Freedoms does not extend to “activi- ties by non-governmental entities created by government for legally facilitating private individuals do things of their own choosing with- out engaging governmental responsibility”, the by-laws of the condo- 348 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

minium corporation are not bound by the Charter: Condominium Plan No. 9310520, at para.5. Nor, as Hawco J. concluded at para.6, are they governed by s.4 the Alberta Human Rights Act, R.S.A. 2000, c.A-25.5, because that section prohibits discrimination against any person or class of person with respect of accommodation or fa- cilities that are customarily available to the public, and of course con- dominium units are not. It is not at all uncommon, for example, for condominium By-laws to discriminate on the basis of age, and it is well established that a condominium corporation is legally entitled to do so. 61 The difficulty with these decisions is that Davis relies entirely on Smith. Smith in turn relies on an interpretation given to Gay Alliance Toward Equality v. Vancouver Sun (1979), 97 D.L.R. (3d) 577 (S.C.C.). However, Gay Alliance was effectively overturned, or limited to very narrow facts, by the Supreme Court’s decision in Berg v. University of British Columbia. 62 In that case, the Supreme Court stated at page 18: I agree, and would limit the holding in Gay Alliance on two bases: (i) the respondent’s competing interest in the freedom of the press was used to limit the complainant’s right to freedom from discrimination in that decision, and (ii) the reasoning of Martland J. leads to an arti- ficial and unacceptable distinction between the rights a person has at the threshold of admission to an accommodation, service or facility, and the rights he or she has once admitted to the accommodation, service or facility. 63 The decision continued at page 20: Therefore, I would reject any definition of “public” which refuses to recognize that any accommodation, service or facility will only ever be available to a subset of the public. Students admitted to a univer- sity or school within the university, or people who enter into con- tracts of insurance with a public insurer, or people who open ac- counts with financial institutions, become the “public” for that service. Every service has its own public, and once that “public” has been defined through the use of eligibility criteria, the Act prohibits discrimination within that public. 64 As such, the finding in Berg that “every service has its public” and the limitations in that case on Gay Alliance indicate that I should not follow the two previous Alberta decisions on point. 65 I note that the Courts in British Columbia have had no difficulty with the applicability of human rights legislation to condominium corpora- Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 349

tions, as evidenced by the cases from British Columbia cited by the Commission. British Columbia human rights legislation appears similar to Alberta’s. I also note that in Syndicat Northcrest c. Amselem, 2004 SCC 47 (S.C.C.), none of the Courts appear to have had any difficulty with the applicability to human rights legislation to a condominium cor- poration decision banning an owner from placing a ceremonial sukkah (hut) on his balcony during Sukkot, a Jewish festival. 66 I have not compared Quebec human rights legislation with Alberta’s, and jurisdictional arguments do not seem to feature in at least the Su- preme Court’s decision. 67 There appears to be no judicial precedent that supports the Corpora- tion’s arguments on the absence of jurisdiction. Different considerations were at play in Condominium Plan No. 9422336 v. R.. That was a tax case that essentially pierced the corporate veil, not a human rights case. It is of no assistance here.

Condominium Property Act 68 Mr. Noce argues that the Condominium Property Act provides a com- plete mechanism or code for dealing with all complaints between an owner and the condominium corporation by way of Section 67 of that Act, quoted above. 69 No precedent has been provided where an owner has used an oppres- sive conduct remedy such as that provided in Section 67 to address human rights-prohibited discrimination. 70 I accept that Section 67 is broad enough to encompass a claim for discrimination, and undoubtedly goes beyond the prohibited grounds in the Act by allowing for remedies in appropriate circumstances when the exercise of the board’s powers is “oppressive or unfairly prejudicial to or that unfairly disregards the interests” of an interested party. 71 That being said, the process under Section 67 is to commence an ac- tion in the Court of Queen’s Bench and proceed through civil litigation processes. 72 That process is a difficult and expensive process that would be diffi- cult for an unrepresented party. A disabled party may have even more difficulty with such a process. The conduct of the process is the responsi- bility of the applicant. The application or trial would ultimately be heard by a judge who likely has no specialized expertise in human rights. The applicant may find it especially galling when the board approves a spe- 350 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

cial levy on all owners to pay the legal costs of defending itself against the application. The disabled party must pay his proportionate share or run the risk of proceedings being brought against him for non-payment. I recognize Mr. Noce’s argument that the Courts have dealt with such is- sues creatively, but court remedies are slow, uncertain and long after the fact. 73 Contrast this with a complaint to the Commission. There is special- ized expertise there at all levels of the process. The complaint process is essentially free to the complainant. Safeguards remain in place by way of an appeal of the ultimate decision to the Court of Queen’s Bench. 74 The Condominium Property Act does not purport to limit proceedings between owners and the condominium corporation or board to proceed- ings under that Act, and there is nothing in the Condominium Property Act to oust the jurisdiction of the Commission. 75 Ultimately, this is a situation where there is likely concurrent jurisdic- tion. A complainant might choose to commence proceedings under the Condominium Property Act. There may be greater scope there for dam- ages against individual board members or different remedies. An ag- grieved owner may have a host of complaints, some of which may clearly be outside the jurisdiction of the Commission. 76 However, that does not mean that complainants may not simply pro- ceed with a complaint to the Commission when they believe that they have been unlawfully discriminated against. 77 In their supplemental brief, the Corporation emphasizes the unique nature of condominiums and contrasts them with natural persons and “real” corporations. The cases cited emphasize the binding nature of by- laws and board decisions and their applicability to all owners. 78 Interference with board decisions is limited to situations where the “board’s decision is clearly oppressive, unreasonable and contrary to leg- islation” (citing 934859 Alberta Inc. v. Condominium Corp. No. 0312180, 2007 ABQB 640 (Alta. Q.B.) at para 54). 79 The Corporation also cites a blog by Richard I. John, Condominium Complexes are Private: a Defense Against the creeping expansion of the Alberta Human Rights Commission. The Corporation’s brief states “Mr. John’s comments are very insightful and forewarn of the possible diffi- culties which may arise in Alberta as a consequence of the imposition of human rights legislation”. Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 351

80 I am doubtful that self-published blogs should be considered as au- thorities for court purposes. However, since it has been submitted to me, I reject the tenor of it that there is anything particularly wrong with human rights protections being expanded. That is contrary to the broad scope to be given to protect Canadians from unlawful discrimination as directed in cases such as McCormick v. Fasken Martineau Dumoulin LLP, 2014 SCC 39 (S.C.C.) at paragraph 21: As this Court said in University of British Columbia v. Berg, 1993 CanLII 89 (SCC), [1993] 2 S.C.R. 353: “It is the duty of boards and courts to give [provisions] a liberal and purposive construction, with- out reading the limiting words out of the Act or otherwise circum- venting the intention of the legislature” (p. 371). 81 I offer an example. Assume that a condominium corporation has as part of its common property a swimming pool. Assume that the duly elected board of that corporation decides that no *****s (fill in whom- ever you choose by way of race, religious beliefs, colour, gender, gender identity, gender expression, physical disability, mental disability, age, ancestry, place of origin, marital status, source of income, family status or sexual orientation) may use the swimming pool. Ms. X is *****. 82 Is Ms. X to be required to commence an action under section 67 of the Condominium Property Act to address that discrimination, or is Ms. X able to make a complaint to the Commission? 83 It seems to me that the answer is clearly “yes”.

Overbreadth and Tautology 84 I am unable to find any inconsistencies between Sections 4 and 5, as argued by the Corporation. I see nothing inconsistent with providing ex- press remedies for tenants in Section 5, intended to deal with landlords refusing to rent premises to people on the basis of their personal characteristics. 85 Indeed, I do not see that Section 4 does not, or cannot apply to tenants in the context of the Berg decision. Following that decision, tenants are likely the “public” to their landlords, such that landlords may be subject to Section 4 in the event of prohibited discrimination in the provision of a service to its “public”.

Deference 86 Mr. Noce argues that the Court should give deference to the decisions of the democratically elected board of a condominium corporation. No 352 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

deference is due to a body that discriminates under the Alberta Human Rights Act. The tyranny of the majority does not withstand unlawful dis- crimination. This argument is without merit.

Floodgates 87 The Corporation also suggests that the possibility of a huge number of complaints about condominium corporations flooding the Commission is a factor against interpreting the Act as permitting such complaints to be made. 88 That argument is without merit for at least two reasons. Firstly, that argument was rejected in SMS Equipment Inc. v. CEP, Local 707, 2015 ABQB 162 (Alta. Q.B.), at paragraph 78: [78] As discussed by the Arbitrator, proponents of a restrictive test for prima facie discrimination based on family status raised concerns regarding a potential flood of requests for workplace accommodation on the basis of family status. I agree with the Arbitrator’s comments regarding this argument (Arbitrator’s Decision at para 61): ... I am of the opinion that “floodgate” arguments have no place in the analysis of whether discrimination exists. If an employer rule expressly prohibited the hiring of mothers as welders, we would not be reluctant to find the prohibition to be discriminatory for fear that employers would now be flooded with application by mothers. To the extent that a flood of requests for accommodations imposes an excessive burden upon an employer, the place for considering that is in the assessment of undue hard- ship. In this case, there is no evidence that the Employer has received any other requests for accommodation on the basis of family status. More broadly, family status was added to the [AHRA] as a prohibited ground of discrimi- nation in 1996. There are fewer than one dozen reported human rights tribunal or arbitration cases in Alberta deal- ing with family status employment discrimination in the past 17 years. This does not suggest to me that Alberta employees are routinely demanding that their employers accommodate every conflict between a work and a paren- tal obligation. 89 Secondly, Ganser v. Rosewood Estates Condominium Corp. is some sixteen years old. Anecdotally, the Commission has processed com- plaints against condominium corporations by owners since then. If there Condominium Corp. No. 052 0580 v. Alberta Robert A. Graesser J. 353

was a worry about the floodgates opening, they would appear to have been open for a long time, with no sign of any floods.

Conclusion 90 The decision of Mr. Borle to accept jurisdiction to investigate Mr. Goldsack’s complaint was reasonable. The Berg decision opens the door to the Commission looking to see if the assignment of parking stalls in Tradition at Southbrook was the provision of a service to the public, in the context that the owners at Tradition at Southbrook are the “public” for the Corporation and its board. Following the Ganser v. Rosewood Estates Condominium Corp. decision from the Commission was not unreasonable. 91 In my view, no reviewable error was made. The Commission is enti- tled to proceed with its investigation. If the Commission determines that parking stall allocations are a service within Section 4, and that Mr. Goldsack is a member of the Corporation’s “public,” they will have to go on to consider whether there has been unlawful discrimination and to consider the appropriate remedy. 92 Those decisions are all within the jurisdiction and expertise of the Commission, and it should be allowed to proceed. 93 I make no finding on these issues other than to hold that the Commis- sion has jurisdiction to investigate under the Act. Application dismissed. 354 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

[Indexed as: R. v. Richards] Her Majesty the Queen, Crown and Christopher Brian Richards, Accused Alberta Court of Queen’s Bench Docket: Calgary 130379449Q1 2016 ABQB 176 S.L. Hunt McDonald J. Heard: January 4-8, 2016; January 12-15, 2016 Judgment: March 22, 2016 Criminal law –––– Charter of Rights and Freedoms — Arbitrary detention or imprisonment [s. 9] –––– Accused was charged with possession for purpose of trafficking contrary to s. 5(2) of Controlled Drugs and Substances Act follow- ing his arrest and search of his residence — Accused contended that officer in- structing accused’s arrest did not have reasonable and probable grounds to be- lieve accused had committed offence — Voir dire was held to determine admissibility of evidence — Evidence admissible — Officer had requisite sub- jective belief to arrest accused — Information received, combined with officer’s experience in complex drug investigations and covert surveillance, gave him reasonable and probable grounds to direct arrest — Officer was told that accused was subject of drug investigation for over two years and that he travelled to Red Deer where he often met drug runners — Short duration of meet in parking lot before he headed back to Calgary would lead reasonable person in officer’s po- sition to believe that drug transaction had taken place — Factors taken together were sufficient in their cumulative effect to constitute reasonable and probable grounds to order arrest of accused. Criminal law –––– Charter of Rights and Freedoms — Unreasonable search and seizure [s. 8] — Warrant requirements –––– Accused was charged with possession for purpose of trafficking contrary to s. 5(2) of Controlled Drugs and Substances Act (CDSA) following his arrest and search of his residence — Ac- cused challenged validity of warrant that was issued pursuant to s. 11 of CDSA — Voir dire was held to determine admissibility of evidence — Evidence admissible — ITO contained sufficient evidence such that justice of peace val- idly issued search warrant — Search of accused’s home was therefore warranted and reasonable and did not breach his rights under s. 8 of Canadian Charter of Rights and Freedoms — Court was satisfied as to reliability of detective’s description of second-hand reports relied upon in ITO — In each instance, detective specified date on which he read each report and who authored it, as well as date report was written — Details that accused was high-up figure in R. v. Richards 355 certain area in drug trade, that he trafficked drugs inter-provincially, that he used various cell phone numbers, that he employed runners, that he used aliases and that he tended to move around often were all independently corroborated by three informants. Criminal law –––– Charter of Rights and Freedoms — Arrest or detention [s. 10] — Right to counsel [s. 10(b)] — Right to retain and instruct counsel without delay –––– Accused was charged with possession for purpose of traf- ficking contrary to s. 5(2) of Controlled Drugs and Substances Act following his arrest and search of his residence — Accused contended that his rights under s. 10(b) of Canadian Charter of Rights and Freedoms were violated when police did not permit him to contact counsel for extended period of time while in cus- tody — Voir dire was held to determine admissibility of evidence — Evidence admissible, on other grounds — Accused’s right to counsel was violated by de- lay of four hours and 41 minutes — Breach began at 4:20 p.m., time that ac- cused arrived at police headquarters, had been searched and was in officer’s cus- tody — Length of delay was time elapsed between 4:20 p.m. and 9:01 p.m. — Other than generalities, there were no details provided as to why there were concerns over officer safety or destruction of evidence — Explanation was in- sufficient to justify denial of rights under Charter — It was not necessary to dis- sect distinction between reasonable and extraordinary or exception circum- stances; even on lower standard of reasonable circumstances, officer’s justification for delay was not reasonable — It was not reasonable to delay right of arrested person to contact counsel on basis of ongoing investigation and then fail to follow up with record of investigation. Criminal law –––– Charter of Rights and Freedoms — Charter remedies [s. 24] — Exclusion of evidence –––– Accused was charged with possession for purpose of trafficking contrary to s. 5(2) of Controlled Drugs and Substances Act following his arrest and search of his residence — Accused contended that his rights under s. 10(b) of Canadian Charter of Rights and Freedoms were vio- lated when police did not permit him to contact counsel for extended period of time while in custody — Voir dire was held to determine admissibility of evi- dence — Evidence admissible — Accused’s right to counsel was violated by de- lay of four hours and 41 minutes, but evidence found at his home was not in any way linked or connected to s. 10(b) breach — No direct causal link existed be- tween evidence found during search of residence and violation of s. 10(b) — There was no evidence that facilitating accused’s right to counsel earlier would have affected collection of evidence at his residence — Sufficient temporal con- nection between breach and discovery of evidence did not exist — While search and collection of evidence occurred after Charter breach, almost three hours elapsed between end of breach, when accused called his lawyer, and when po- lice executed search warrant — Contextual nexus was not established — There was technical breach of s. 8 of Charter because Report to Justice was not filed 356 ALBERTA LAW REPORTS 35 Alta. L.R. (6th) under s. 487.1 of Criminal Code in connection with issuance of telewarrant — In balancing s. 24(2) Charter factors in assessing exclusion, evidence was not to be excluded in this case — Detective genuinely believed he had filed Report to Justice, and there was no dishonesty, negligence or bad faith. Cases considered by S.L. Hunt McDonald J.: Canada (Director of Investigation & Research, Combines Investigation Branch) v. Southam Inc. (1984), [1984] 2 S.C.R. 145, (sub nom. Hunter v. Southam Inc.) 11 D.L.R. (4th) 641, (sub nom. Hunter v. Southam Inc.) 55 N.R. 241, 33 Alta. L.R. (2d) 193, (sub nom. Hunter v. Southam Inc.) 55 A.R. 291, 27 B.L.R. 297, (sub nom. Hunter v. Southam Inc.) 2 C.P.R. (3d) 1, 41 C.R. (3d) 97, (sub nom. Hunter v. Southam Inc.) 9 C.R.R. 355, 84 D.T.C. 6467, (sub nom. Hunter v. Southam Inc.) 14 C.C.C. (3d) 97, (sub nom. Director of Investigations & Research Combines Investigation Branch v. Southam Inc.) [1984] 6 W.W.R. 577, 1984 CarswellAlta 121, 1984 CarswellAlta 415, [1984] S.C.J. No. 36 (S.C.C.) — considered Ouellette c. Nouveau-Brunswick (1996), 23 M.V.R. (3d) 161, 22 M.V.R. (3d) 172, 2 C.R. (5th) 223, (sub nom. R. v. Ouellette) 111 C.C.C. (3d) 336, 182 N.B.R. (2d) 306, 463 A.P.R. 306, 1996 CarswellNB 493, [1996] N.B.J. No. 439, 1996 CarswellNB 715 (N.B. C.A.) — considered Qu´ebec (Procureur g´en´eral) c. Laroche (2002), 2002 SCC 72, 2002 Carswell- Que 2413, 2002 CarswellQue 2414, (sub nom. Quebec (Attorney General) v. Laroche) 169 C.C.C. (3d) 97, 219 D.L.R. (4th) 723, 6 C.R. (6th) 272, 295 N.R. 291, (sub nom. Quebec (Attorney General) v. Laroche) 99 C.R.R. (2d) 252, [2002] 3 S.C.R. 708, REJB 2002-35623, [2002] S.C.J. No. 74 (S.C.C.) — referred to R. c. Archambault (2010), EYB 2010-172618, 2010 CarswellQue 3418, 73 C.R. (6th) 384, 208 C.R.R. (2d) 1, 2010 QCCQ 4710, [2010] Q.J. No. 1537 (C.Q.) — referred to R. c. Archambault (2012), 2012 QCCA 20, EYB 2012-200441, 2012 Carswell- Que 73, 91 C.R. (6th) 381, 2012 CarswellQue 11573, 307 C.C.C. (3d) 151 (C.A. Que.) — referred to R. v. Araujo (2000), 2000 SCC 65, 2000 CarswellBC 2438, 2000 CarswellBC 2440, [2000] S.C.J. No. 65, 193 D.L.R. (4th) 440, 38 C.R. (5th) 307, 149 C.C.C. (3d) 449, 262 N.R. 346, 143 B.C.A.C. 257, 235 W.A.C. 257, [2000] 2 S.C.R. 992, 79 C.R.R. (2d) 1, REJB 2000-21474 (S.C.C.) — referred to R. v. Bartle (1994), 33 C.R. (4th) 1, 23 C.R.R. (2d) 193, [1994] 3 S.C.R. 173, 172 N.R. 1, 92 C.C.C. (3d) 289, 74 O.A.C. 161, 118 D.L.R. (4th) 83, 6 M.V.R. (3d) 1, 19 O.R. (3d) 802 (note), 1994 CarswellOnt 100, 1994 Cars- wellOnt 1164, [1994] S.C.J. No. 74, EYB 1994-67664 (S.C.C.) — considered R. v. Brown (2003), 2003 CarswellOnt 5022, [2003] O.J. No. 5089, [2003] O.T.C. 1093 (Ont. S.C.J.) — considered R. v. Richards 357

R. v. Burlingham (1995), 38 C.R. (4th) 265, 97 C.C.C. (3d) 385, 181 N.R. 1, 124 D.L.R. (4th) 7, 58 B.C.A.C. 161, 96 W.A.C. 161, 28 C.R.R. (2d) 244, [1995] 2 S.C.R. 206, 1995 CarswellBC 71, 1995 CarswellBC 639, [1995] S.C.J. No. 39, EYB 1995-66969 (S.C.C.) — considered R. v. Caissey (2007), 2007 ABCA 380, 2007 CarswellAlta 1640, 84 Alta. L.R. (4th) 226, 227 C.C.C. (3d) 322, [2008] 4 W.W.R. 100, 415 W.A.C. 208, 422 A.R. 208, [2007] A.J. No. 1342 (Alta. C.A.) — referred to R. v. Camacho (2011), 2011 BCSC 175, 2011 CarswellBC 257, [2011] B.C.J. No. 214, 228 C.R.R. (2d) 63 (B.C. S.C.) — considered R. v. Celestin (2013), 2013 ABPC 242, 2013 CarswellAlta 1719, [2013] A.J. No. 965, 290 C.R.R. (2d) 170 (Alta. Prov. Ct.) — considered R. v. Clow (2012), 2012 ABQB 656, 2012 CarswellAlta 2012, [2012] A.J. No. 1173, 71 Alta. L.R. (5th) 219, 273 C.R.R. (2d) 178, 552 A.R. 64 (Alta. Q.B.) — considered R. v. De Jong (2016), 2016 ABQB 116, 2016 CarswellAlta 256, [2016] A.J. No. 198 (Alta. Q.B.) — considered R. v. Debot (1989), 73 C.R. (3d) 129, [1989] 2 S.C.R. 1140, 102 N.R. 161, 37 O.A.C. 1, 52 C.C.C. (3d) 193, 45 C.R.R. 49, 1989 CarswellOnt 111, 1989 CarswellOnt 966, [1989] S.C.J. No. 118, EYB 1989-67472 (S.C.C.) — considered R. v. Duguay (1985), 8 O.A.C. 31, 50 O.R. (2d) 375, 45 C.R. (3d) 140, 18 C.C.C. (3d) 289, 18 D.L.R. (4th) 32, 17 C.R.R. 203, 1985 CarswellOnt 92, 67 O.R. (2d) 160 (note), [1985] O.J. No. 2492 (Ont. C.A.) — considered R. v. Duguay (1989), 91 N.R. 201, [1989] 1 S.C.R. 93, 56 D.L.R. (4th) 46, 31 O.A.C. 177, 46 C.C.C. (3d) 1, 67 C.R. (3d) 252, 38 C.R.R. 1, 67 O.R. (2d) 160 (note), 1989 CarswellOnt 954, 1989 CarswellOnt 68, EYB 1989-67443, [1989] S.C.J. No. 4, [1989] A.C.S. No. 4 (S.C.C.) — referred to R. v. Edwards (2009), 2009 NLTD 167, 2009 CarswellNfld 359, [2009] N.J. No. 376 (N.L. T.D.) — considered R. v. Garcia-Machado (2015), 2015 ONCA 569, 2015 CarswellOnt 11969, [2015] O.J. No. 4146, 81 M.V.R. (6th) 173, 126 O.R. (3d) 737, 327 C.C.C. (3d) 215, 337 O.A.C. 302 (Ont. C.A.) — considered R. v. Garofoli (1990), 80 C.R. (3d) 317, [1990] 2 S.C.R. 1421, 116 N.R. 241, 43 O.A.C. 1, 36 Q.A.C. 161, 60 C.C.C. (3d) 161, 50 C.R.R. 206, 1990 Cars- wellOnt 119, 1990 CarswellOnt 1006, [1990] S.C.J. No. 115, EYB 1990- 67574 (S.C.C.) — referred to R. v. Goldhart (1996), 48 C.R. (4th) 297, 28 O.R. (3d) 480, 107 C.C.C. (3d) 481, 136 D.L.R. (4th) 502, 198 N.R. 321, 37 C.R.R. (2d) 1, [1996] 2 S.C.R. 463, 92 O.A.C. 161, 1996 CarswellOnt 2739, 1996 CarswellOnt 2740, [1996] S.C.J. No. 76, EYB 1996-67696 (S.C.C.) — considered R. v. Grant (2009), 2009 SCC 32, 2009 CarswellOnt 4104, 2009 CarswellOnt 4105, 66 C.R. (6th) 1, [2009] S.C.J. No. 32, [2009] A.C.S. No. 32, 245 C.C.C. (3d) 1, 82 M.V.R. (5th) 1, 309 D.L.R. (4th) 1, 391 N.R. 1, 253 358 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

O.A.C. 124, [2009] 2 S.C.R. 353, 193 C.R.R. (2d) 1, 97 O.R. (3d) 318 (note), EYB 2009-161617 (S.C.C.) — followed R. v. Guiller (1985), 25 C.R.R. 273, 1985 CarswellOnt 1731, [1985] O.J. No. 2442 (Ont. Dist. Ct.) — considered R. v. Heng (2014), 2014 ABCA 325, 2014 CarswellAlta 1762, [2014] A.J. No. 1090, 580 A.R. 397, 620 W.A.C. 397, 319 C.R.R. (2d) 373 (Alta. C.A.) — considered R. v. Lising (2005), 2005 SCC 66, 2005 CarswellBC 2691, 2005 CarswellBC 2692, (sub nom. R. v. Pires) 259 D.L.R. (4th) 441, (sub nom. Lising v. The Queen) 201 C.C.C. (3d) 449, 33 C.R. (6th) 241, 241 N.R. 147, 217 B.C.A.C. 65, 358 W.A.C. 65, 49 B.C.L.R. (4th) 33, [2006] 4 W.W.R. 403, (sub nom. R. v. Pires) 136 C.R.R. (2d) 85, [2005] 3 S.C.R. 343, [2005] S.C.J. No. 67 (S.C.C.) — referred to R. v. Manninen (1987), 76 N.R. 198, 58 C.R. (3d) 97, 21 O.A.C. 192, 34 C.C.C. (3d) 385, [1987] 1 S.C.R. 1233, 41 D.L.R. (4th) 301, 61 O.R. (2d) 736 (note), 38 C.R.R. 37, 1987 CarswellOnt 967, 1987 CarswellOnt 99, [1987] S.C.J. No. 41, EYB 1987-67474 (S.C.C.) — followed R. v. Mian (2014), 2014 SCC 54, 2014 CSC 54, 2014 CarswellAlta 1561, 2014 CarswellAlta 1562, [2014] S.C.J. No. 54, 13 C.R. (7th) 1, 462 N.R. 1, 377 D.L.R. (4th) 385, 315 C.C.C. (3d) 453, [2014] 2 S.C.R. 689, 580 A.R. 1, 620 W.A.C. 1, 319 C.R.R. (2d) 4, 2 Alta. L.R. (6th) 217 (S.C.C.) — considered R. v. Montgomery (2009), 2009 BCCA 41, 2009 CarswellBC 244, 241 C.C.C. (3d) 469, 265 B.C.A.C. 284, 446 W.A.C. 284 (B.C. C.A.) — considered R. v. Morelli (2010), 2010 SCC 8, 2010 CarswellSask 150, 2010 CarswellSask 151, [2010] 4 W.W.R. 193, 72 C.R. (6th) 208, 252 C.C.C. (3d) 273, [2010] S.C.J. No. 8, 316 D.L.R. (4th) 1, (sub nom. R. v. U.P.M.) 399 N.R. 200, [2010] 1 S.C.R. 253, 207 C.R.R. (2d) 153, (sub nom. R. v. U.P.M.) 346 Sask. R. 1, (sub nom. R. v. U.P.M.) 477 W.A.C. 1, [2010] A.C.S. No. 8 (S.C.C.) — followed R. v. Morris (1998), 1998 CarswellNS 489, [1998] N.S.J. No. 492, 173 N.S.R. (2d) 1, 527 A.P.R. 1, 23 C.R. (5th) 354, 134 C.C.C. (3d) 539, 1998 NSCA 229 (N.S. C.A.) — considered R. v. Pastro (1988), 66 Sask. R. 241, 42 C.C.C. (3d) 485, 39 C.R.R. 108, 1988 CarswellSask 188, [1988] S.J. No. 412 (Sask. C.A.) — considered R. v. Plaha (2004), 2004 CarswellOnt 3424, 188 C.C.C. (3d) 289, 189 O.A.C. 376, 24 C.R. (6th) 360, 123 C.R.R. (2d) 18, [2004] O.J. No. 3484 (Ont. C.A.) — considered R. v. Playford (1987), 61 C.R. (3d) 101, 24 O.A.C. 161, 40 C.C.C. (3d) 142, 63 O.R. (2d) 289, 1987 CarswellOnt 122, [1987] O.J. No. 1107 (Ont. C.A.) — considered R. v. Riley (2009), 2009 CarswellOnt 912, [2009] O.J. No. 738 (Ont. S.C.J.) — followed R. v. Richards 359

R. v. S. (S.) (2008), 2008 ONCA 578, 2008 CarswellOnt 4675, [2008] O.J. No. 3072, 176 C.R.R. (2d) 68, 269 O.A.C. 259 (Ont. C.A.) — considered R. v. Sadikov (2014), 2014 ONCA 72, 2014 CarswellOnt 752, [2014] O.J. No. 376, 305 C.C.C. (3d) 421, 314 O.A.C. 357, 300 C.R.R. (2d) 308 (Ont. C.A.) — considered R. v. Storrey (1990), 105 N.R. 81, [1990] 1 S.C.R. 241, 37 O.A.C. 161, 53 C.C.C. (3d) 316, 75 C.R. (3d) 1, 47 C.R.R. 210, 1990 CarswellOnt 78, 1990 CarswellOnt 989, [1990] S.C.J. No. 12, EYB 1990-67522 (S.C.C.) — re- ferred to R. v. Strachan (1988), [1989] 1 W.W.R. 385, 56 D.L.R. (4th) 673, 37 C.R.R. 335, [1988] 2 S.C.R. 980, 90 N.R. 273, 46 C.C.C. (3d) 479, 67 C.R. (3d) 87, 1988 CarswellBC 699, 1988 CarswellBC 768, [1988] S.C.J. No. 94 (S.C.C.) — considered R. v. Suberu (2009), 2009 SCC 33, 2009 CarswellOnt 4106, 2009 CarswellOnt 4107, 66 C.R. (6th) 127, 245 C.C.C. (3d) 112, [2009] S.C.J. No. 33, 390 N.R. 303, 309 D.L.R. (4th) 114, 252 O.A.C. 340, 97 O.R. (3d) 480 (note), [2009] 2 S.C.R. 460, 193 C.R.R. (2d) 96 (S.C.C.) — considered R. v. Taylor (2014), 2014 SCC 50, 2014 CSC 50, 2014 CarswellAlta 1154, 2014 CarswellAlta 1155, [2014] S.C.J. No. 50, [2014] A.C.S. No. 50, 62 M.V.R. (6th) 1, [2014] 8 W.W.R. 419, 98 Alta. L.R. (5th) 40, 12 C.R. (7th) 1, 374 D.L.R. (4th) 64, 460 N.R. 101, 311 C.C.C. (3d) 285, 572 A.R. 81, 609 W.A.C. 81, [2014] 2 S.C.R. 495, 314 C.R.R. (2d) 307 (S.C.C.) — referred to R. v. Vuozzo (2010), 2010 ABQB 437, 2010 CarswellAlta 2379 (Alta. Q.B.) — considered R. v. Vuozzo (2013), 2013 ABCA 130, 2013 CarswellAlta 459, [2013] A.J. No. 313, 544 A.R. 271, 567 W.A.C. 271, 83 Alta. L.R. (5th) 322, [2013] 11 W.W.R. 672, 282 C.R.R. (2d) 311 (Alta. C.A.) — considered R. v. Wilson (2011), 2011 BCCA 252, 2011 CarswellBC 1269, [2011] B.C.J. No. 965, 305 B.C.A.C. 254, 515 W.A.C. 254, 272 C.C.C. (3d) 269, 238 C.R.R. (2d) 140 (B.C. C.A.) — referred to R. v. Wittwer (2008), 2008 SCC 33, 2008 CarswellBC 1091, 2008 CarswellBC 1092, 231 C.C.C. (3d) 97, 375 N.R. 217, 57 C.R. (6th) 205, 294 D.L.R. (4th) 133, (sub nom. R. v. D.H.W.) 255 B.C.A.C. 1, (sub nom. R. v. D.H.W.) 430 W.A.C. 1, [2008] 2 S.C.R. 235, 173 C.R.R. (2d) 174, [2008] S.C.J. No. 33 (S.C.C.) — considered R. v. Wynter (2016), 2016 ONSC 143, 2016 CarswellOnt 199, [2016] O.J. No. 105 (Ont. S.C.J.) — referred to Restaurant Le Cl´emenceau Inc. v. Drouin (1987), 26 Admin. L.R. 106, 35 C.C.C. (3d) 381, [1987] R.D.F.Q. 83, [1987] 1 S.C.R. 706, 77 N.R. 72, 8 Q.A.C. 170, 42 D.L.R. (4th) 761, 1987 CarswellQue 87, 1987 CarswellQue 93 (S.C.C.) — referred to Schaeffer v. Woods (2013), 2013 SCC 71, 2013 CarswellOnt 17584, 2013 Cars- wellOnt 17585, [2013] S.C.J. No. 71, 7 C.R. (7th) 59, 367 D.L.R. (4th) 1, 360 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

312 O.A.C. 1, 62 Admin. L.R. (5th) 1, 304 C.C.C. (3d) 445, 452 N.R. 286, (sub nom. Wood v. Schaeffer) [2013] 3 S.C.R. 1053, (sub nom. Wood v. Schaeffer) 297 C.R.R. (2d) 260, 128 O.R. (3d) 719 (note) (S.C.C.) — re- ferred to Statutes considered: 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. 8 — considered s. 9 — considered s. 10 — considered s. 10(b) — considered s. 24(2) — considered Controlled Drugs and Substances Act, S.C. 1996, c. 19 Generally — referred to s. 5(2) — considered s. 11 — considered s. 11(1) — considered Criminal Code, R.S.C. 1985, c. C-46 s. 443(1)(e) — considered s. 487.1 [en. R.S.C. 1985, c. 27 (1st Supp.), s. 69] — considered s. 489(1) — considered s. 495 — considered s. 495(1)(a) — considered s. 529.5 [en. 1997, c. 39, s. 2] — considered Narcotic Control Act, R.S.C. 1985, c. N-1 Generally — referred to Words and phrases considered: excision Excision is a remedy at the discretion of the reviewing judge to remove errone- ous or illegally obtained evidence that was included in the ITO and which justi- fied the issuance of the warrant by the Justice of the Peace. Amplification is the opposite; it is the consideration of additional evidence presented at the voir dire to correct minor errors in the ITO: Morelli para. 41 [R. v. Morelli, 2010 SCC 8].

VOIR DIRE to determine admissibility of evidence.

Gregory Harlow, Danielle Szabo, for Crown Karen Molle, Kim Arial, for Accused R. v. Richards S.L. Hunt McDonald J. 361

S.L. Hunt McDonald J.: Introduction 1 The accused, Christopher Brian Richards, brought an application to exclude evidence on the basis that the police violated his rights under sections 8, 9 and 10 of the Canadian Charter of Rights and Freedoms, Part 1, Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 (the “Charter”). 2 The evidence and submissions in the voir dire were heard between January 4 and 8, 2016. On January 12, 2016, I dismissed the application and ruled the evidence admissible. I indicated that written reasons would follow. These are my written reasons. 3 Mr. Richards is charged with possession for the purpose of trafficking contrary to section 5(2) of the Controlled Drug and Substances Act, SC 1996, c 19 (the “CDSA”) following his arrest and a search of his resi- dence on February 7, 2013, in Calgary. 4 The section 8 argument of the defence challenged the validity of the warrant that was issued pursuant to section 11 of the CDSA. 5 Regarding section 9, the defence submitted that the officer instructing Mr. Richards’ arrest did not have reasonable and probable grounds to believe that Mr. Richards had committed the offence. 6 With respect to section 10(b) of the Charter, the defence contends that this right was violated when the police did not permit Mr. Richards to contact counsel for an extended period of time while in custody. While the Crown concedes that the delay by the police in facilitating access to counsel constitutes a breach of section 10(b), the Crown and defence dis- agree as to the length of the delay and whether the impugned evidence ought to be excluded under section 24(2) of the Charter. 7 The following individuals testified on the voir dire: Cst. Pearson; Cst. Braun; Cst. Kelly; Cst. Christie; Det. Lindemann; Det. Mills; RCMP Cst. Matthies; Det. Tudor; Sgt. Johnson; and Det. Mohan. 8 I found all the police officers to be forthright when providing evi- dence and in giving their responses in cross-examination.

Timeline of Events 9 The timeline of events on February 7-8, 2013, the dates of Mr. Rich- ards’ arrest and the search of his residence, is as follows: February 7, 2013 362 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

9:30 a.m. (approximately): Detective Mohan of the Camrose Police Service requests assistance from Sargeant Leckie of the Calgary Po- lice Service (CPS) regarding its investigation of Mr. Richards; Sgt. Leckie calls in CPS Constable Pearson early to assist with the Camrose investigation; CPS Cst. Pearson speaks with Det. Mohan who provides him with a brief overview of the Camrose police’s investigation, including Mr. Richards’ Calgary address on Pantego Way. Det. Mohan informs Cst. Pearson that the Camrose Police had received information that Mr. Richards was a drug dealer and supplier in the Camrose and sur- rounding areas. Additionally, Det. Mohan had received information that Mr. Richards had plans to attend a drug meeting in Red Deer that day. 10:00 a.m. (approximately): Cst. Pearson asks a CPS analyst to cre- ate a target sheet on Mr. Richards for identification purposes and also to provide any addresses and vehicles relating to Mr. Richards; Cst. Pearson calls Red Deer RCMP Officer Matthies to form a team to assist with a drug meet that may unfold in Red Deer that day. 10:15 a.m. (approximately): Cst. Pearson forms a team and briefs them with an overview of the assistance request from Det. Mohan from Camrose. He advises them the objective is to follow Mr. Rich- ards and track any activity relating to drug trafficking, and to docu- ment any information that may give grounds leading to an arrest or grounds to obtain a CDSA section 11 search warrant. 11:32 a.m.: A covert surveillance team is set up at Mr. Richards’ res- idence on Pantego Way. 11:36 a.m.: CPS Cst. Da Silva-Spence of the surveillance team sees a Caucasian male unknown to her exit the residence, remove a license plate from a brown Acura and install it on a white Dodge Caravan. The Caravan left the residence and another unknown Caucasian male individual installed a different license plate onto the brown Acura. 11:36-11:50 a.m.: The Dodge Caravan is followed by some of the members of the surveillance team. At one point the team loses the Caravan, but it is then located by CPS Sgt. Leckie at a car wash in North East Calgary. The driver is identified as the registered owner of the Caravan. 12:42 p.m.: A black Ford F-150 truck with a Saskatchewan licence plate pulls up in the driveway of Mr. Richards’ residence. The driver is an unknown male. 12:59 p.m.: Constable Kelly/1:15 pm Cst. Pearson: CPS Cst. Linde- mann observes Mr. Richards leaving his residence and get into the R. v. Richards S.L. Hunt McDonald J. 363

passenger seat of the F-150 truck. The recently arrived unknown male drives the truck. 1:00 - 2:15 p.m.: The surveillance team follows the F-150 from Mr. Richards’ Calgary residence to Red Deer. 2:15 p.m.: Cst. Lindemann observes the F-150 enter the parking lot of Costco located on Gasoline Alley in Red Deer. 2:17 p.m.: Cst. Lindemann observes the F-150 leave the Costco park- ing lot. 2:19 p.m.: Red Deer RCMP relay over police radio that while in the parking lot of Costco, Mr. Richards exited the F-150 and walked with his hands in his pockets to a tan GMC Jimmy. Mr. Richards entered and sat in the passenger seat of the Jimmy and was observed to be there for approximately one minute. He then exited the Jimmy and returned to the F-150. 2:20-2:21 p.m. (approximately): The F-150 drove to a gas station in Gasoline Alley of Red Deer. The driver exited the truck and went into the store. 2:22 p.m.: The driver is observed to be back in the F-150. 2:25 p.m.: Mr. Richards is observed to be in the passenger seat of the F-150. 2:26-3:32 p.m.: The surveillance team follows the F-150 returning from Red Deer to Calgary. 2:44 p.m. (approximately): The tan GMC Jimmy (observed in the Costco parking lot) is pulled over by the RCMP in Red Deer, the driver is arrested and approximately three ounces of cocaine is seized from the glove compartment of the vehicle. 3:08 p.m.: Information regarding the arrest is relayed by phone from the Red Deer RCMP to Cst. Pearson while he is travelling back to Calgary following the F-150 truck. 3:10 p.m. (approximately): Cst. Pearson orders officers dressed in uniform to stop the F-150 and to arrest Mr. Richards for possession for the purpose of trafficking. 3:30 p.m.: The F-150 is stopped by Cst. Going and Cst. Braun of the CPS Tac Team at the off ramp on Stoney Trail and Harvest Hills Boulevard in North East Calgary. 3:31 p.m.: Officer Braun arrests Mr. Richards for possession of con- trolled drugs for the purpose of trafficking and provides him his Charter rights. Mr. Richards expresses his wish to contact counsel. 3:45 p.m.: At the arrest site, Officer Braun turns Mr. Richards over to CPS Cst. Christie, who arrived at the scene soon after the arrest. 364 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

4:19 p.m.: Cst. Christie transports Mr. Richards to Westwinds CPS headquarters. Mr. Richards is searched and placed in a holding room by Cst. Christie. 4:20 p.m.: Cst. Kelly takes over custody of Mr. Richards at Westwinds from Cst. Christie. 4:32 p.m.: Cst. Kelly cautions Mr. Richards and provides him his Charter rights. Again, Mr. Richards asks to contact counsel. Cst. Kelly advises Mr. Richards that he may contact counsel once the po- lice obtain entry on the pending search warrant. 5:45 p.m.: Joshua Fader, a roommate of Mr. Richards, arrives at Mr. Richards’ Pantego Way residence and is arrested. 7:13 p.m.: The first telewarrant application is sent by fax by Det. Mohan to the Justice of the Peace Hearing Office in Edmonton. 8:40 p.m.: Jonathan Furey, a roommate of Mr. Richards, arrives at Mr. Richards’ residence and is arrested. 9:01 p.m.: Cst. Kelly allows Mr. Richards to call his lawyer. 9:22 p.m.: The first telewarrant application is rejected on the basis that Appendix A is not deemed to be part of the Information to Ob- tain Warrant request. 9:40 p.m.: The second telewarrant application is made by fax to the Justice of the Peace Hearing Office in Edmonton. 10:00 p.m.: The search warrant is signed by Justice of the Peace Wil- son of the Hearing Office in Edmonton. 11:55 p.m.: The search warrant is executed by CPS at Mr. Richards’ residence on Pantego Way. February 8, 2013 1:02 a.m.: Cst. Lindemann enters the Pantego Way residence. He took a video of the interior of the residence. He then was assigned as an exhibit handler — other police officers conducted a search and he was called over to seize anything relevant to the investigation. He made notes of items seized and noted their location in either the base- ment or main floor diagram he made of the residence. He then re- turned to the Westwinds police headquarters and sent samples of the drugs seized to Health Canada for analysis, and entered the balance of the exhibits into the property unit at Westwinds. 1:05 a.m.: Det. Mill arrives at residence. At 1:27 a.m. he is assigned as the exhibit handler for the second floor of the residence. He re- turned to Westwinds. He sent 28.5 grams of suspected cocaine to Health Canada for analysis. The other relevant documents and drug R. v. Richards S.L. Hunt McDonald J. 365

paraphernalia he seized that were related to the investigation were placed by Det. Mills in a locker of the property unit at Westwinds.

Section 9 - Reasonable and Probable Grounds Accused’s Position 10 Counsel for the defence submits that Cst. Pearson did not have rea- sonable and probable grounds to arrest Mr. Richards. She argues that, at best, Cst. Pearson, in directing his arrest, may have been suspicious of the short meet Mr. Richards had conducted with the driver of the GMC Jimmy in the Costco parking lot. Counsel submits that jumping to the conclusion that it was a drug meet was premature given the limited veri- fied information within Cst. Pearson’s knowledge. Arrest based on suspi- cion, a hunch or pure hope and nothing more is not reasonable and is therefore illegal.

Crown’s Position 11 The Crown submits that the police had reasonable grounds to arrest Mr. Richards. Compelling, corroborated and credible source information amassed over 15 months from 13 separate confidential sources indicated Mr. Richards was supplying a drug distribution network involving at least nine different individuals. On the day of the arrest, Mr. Richards drove to Red Deer from Calgary for a brief one to two minute personal meeting clearly suggesting an exchange of something valuable. Given the source information on Mr. Richards, it was likely drugs. On this basis alone, the Crown submits the police had reasonable grounds to arrest Mr. Richards. 12 In addition to these grounds, the Crown submits that prior to Mr. Richards’ arrest the Red Deer RCMP arrested the driver of the GMC Jimmy and located approximately three ounces of cocaine. The police had reasonable grounds to believe that the interaction between Mr. Rich- ards and the driver of the GMC Jimmy (Mr. Baylis) was a drug transac- tion; therefore Mr. Baylis’ arrest was valid, and he was searchable inci- dent to arrest. As such the evidence of the three ounces of cocaine in Mr. Baylis’ GMC Jimmy is a factor that the police could properly consider when determining their reasonable grounds to arrest Mr. Richards.

Summary of relevant evidence 13 On February 7, 2013, Cst. Pearson was a member of the Calgary Po- lice Service Gang Enforcement Team. He is currently an acting detective 366 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

and is assigned to the General Investigations Section. Cst. Pearson had been with the CPS Gang Enforcement Team since August 2010, and held the position until June 2015. Over that time he was involved in over 50 high level drug investigations. He is also trained as an undercover officer and also in covert surveillance. 14 On February 7, 2013, at the direction of Sgt. Leckie, Cst. Pearson was called into work early and told to contact a detective of the Camrose Police Service. He believed the detective was called Mahon (the detec- tive is actually Det. Mohan). Det. Mohan gave Cst. Pearson a “brief overview” of an investigation he had been conducting into Mr. Richards for over two years. Cst. Pearson understood that Det. Mohan had an ad- dress in Calgary where he believed Mr. Richards resided and Det. Mohan “was looking to try to execute” a CDSA search warrant at that address on Pantego Way. Cst. Pearson was not aware of what type of drug investiga- tion it was. 15 Cst. Pearson was told that Mr. Richards was a drug dealer and he was known to meet drug runners just outside of Camrose or in Red Deer to supply illicit drugs. 16 The Camrose Police Department requested assistance with surveil- lance. The ultimate goal was for the CPS to observe Mr. Richards for activity consistent with drug trafficking and to help finalize the grounds for a CDSA warrant. It was not pre-determined that Mr. Richards would be arrested that day. 17 Cst. Pearson was tasked with setting up a team to provide surveil- lance to follow the movements of Mr. Richards for a possible drug traf- ficking offence anticipated to occur that day at a drug meeting planned in Red Deer. The RCMP in Red Deer was contacted by Cst. Pearson to assist Det. Mohan with surveillance as well, as the Camrose Police De- partment did not have a full surveillance team. 18 After his conversation with Det. Mohan, Cst. Pearson instructed an analyst to prepare a target sheet. At 10:15 am, he met with his team to review the objectives. The objective was to follow Mr. Richards to ob- serve any drug related activity. If they did view drug related activity they would then make a determination on the arrest at that point. The team members were provided with the target sheet relating to Mr. Richards. The surveillance team went to the address at Pantego Way and covert surveillance was set up at approximately 11:45 a.m. Cst. Pearson did not accompany them at this point. He was acting as a liaison between the team and Det. Mohan. R. v. Richards S.L. Hunt McDonald J. 367

19 At approximately 1:15 p.m. on February 7, 2013, Mr. Richards was observed by the surveillance team leaving his residence and entering as a passenger into a black Ford 150 truck with a Saskatchewan driver’s li- cense plate. It was being driven by an unknown party. 20 Cst. Pearson joined the surveillance team as they travelled north- bound on Alberta Highway 2 towards Red Deer. 21 Mr. Richards drove directly to the Costco parking at the south end of Red Deer on Gasoline Alley. 22 Cst. Pearson was not directly observing Mr. Richards but was being relayed pertinent surveillance information by RCMP Officer Matthies from Red Deer over his cell phone. Officer Matthies was either viewing, or had a team member viewing the arrival of the black Ford F-150 as it pulled up to a tan GMC Jimmy in the Costco parking lot at 2:15 p.m. Cst. Pearson maintained contact with Det. Mohan and RCMP Officer Mat- thies of the Red Deer RCMP by 3-way radio. 23 At 2:15 P.M., Cst. Pearson was still in a vehicle driving towards Red Deer. He was receiving observations over the phone from RCMP Officer Matthies who was relaying information he was receiving from one of his team members. 24 It was reported to Cst. Pearson by Officer Matthies that Mr. Richards exited the Ford F-150 and entered into the passenger side of the GMC Jimmy for approximately a minute. His hands were in his pockets on the walk between the vehicles. After a minute, he exited the GMC Jimmy, returned to the Ford F-150 and the Ford F-150 left the Costco parking lot. The GMC Jimmy left in a different direction. 25 At about 3:08 p.m., Officer Matthies called Cst. Pearson to advise that the GMC Jimmy was stopped in Red Deer. He advised that the driver was arrested and approximately three ounces of cocaine was seized from the glove compartment. 26 Based on the information that Cst. Pearson received from Det. Mohan regarding Mr. Richards, the trip taken and the short duration of the meet, Cst. Pearson testified that that he thought the situation was consistent with a drug meet. Specifically, he stated: So my information I received, from Det. Mohan, in regards Mr. Richards supplying drugs in Camrose: meeting a vehicle, being a — or one of his runner vehicles or a vehicle associated to somehow as- sociated to the drug trafficking in Camrose, being a GMC Jimmy: meeting that vehicle in Red Deer, which is consistent with the infor- mation I received from Det. Mohan; the direct trip there; the short 368 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

meet in the vehicle and both vehicles leaving after that, in my mind leads up to be consistent with drug dealing. 27 At this point, based on what Cst. Pearson saw or heard and the way the events had transpired, coupled with the information he received from Officer Matthies that there were approximately three ounces of cocaine found in the glove compartment of the GMC Jimmy, Cst. Pearson was satisfied that a drug deal had taken place. He contacted CPS to arrange for uniformed officers to stop the Ford F-150 during its return trip from Red Deer and to arrest Mr. Richards for possession for the purposes of trafficking.

Cross-Examination of Cst. Pearson 28 Cst. Pearson testified that he did not confirm the information he re- ceived from Det. Mohan. He conceded that he did not know who was relaying the information to Officer Matthies about the meeting in the Costco parking lot in Red Deer. Additionally, Cst. Pearson testified he did not know where his team was in relation to Mr. Richards, the Ford F- 150 truck and the GMC Jimmy in the Costco parking lot.

Legal Principles 29 Section 9 of the Charter protects an accused from arbitrary detention and imprisonment. 30 In this case, the arrest was made without a warrant. Peace officers are authorized to arrest persons under s. 495 of the Criminal Code, RSC 1985, c C-46, without a warrant. Section 495 provides as follows: 495.1 (1) A peace officer may arrest without warrant (a) a person who has committed an indictable offence or who, on reasonable grounds, he believes has committed or is about to commit an indictable offence, 31 The Supreme Court of Canada set out the legal test to apply in deter- mining whether a police officer had reasonable and probable grounds to arrest a person: R. v. Storrey, [1990] 1 S.C.R. 241 (S.C.C.) at para 14. Cory J, speaking for the majority, stated at paras 16 and 17: There is an additional safeguard against arbitrary arrest. It is not suf- ficient for the police officer to personally believe that he or she has reasonable and probable grounds to make an arrest. Rather, it must be objectively established that those reasonable and probable grounds did in fact exist. That is to say a reasonable person, standing in the shoes of the police officer, would have believed that reasonable and R. v. Richards S.L. Hunt McDonald J. 369

probable grounds existed to make the arrest. See R. v Brown (1987), 33 C.C.C. (3d) 54 (N.S.C.A.), at p. 66; Liversidge v Anderson, [1942] A.C. 206 (H.L.), at p. 228. In summary then, the Criminal Code requires that an arresting officer must subjectively have reasonable and probable grounds on which to base the arrest. Those grounds must, in addition, be justifiable from an objective point of view. That is to say, a reasonable person placed in the position of the officer must be able to conclude that there were indeed reasonable and probable grounds for the arrest. On the other hand, the police need not demonstrate anything more than reasonable and probable grounds. Specifically they are not required to establish a prima facie case for conviction before making the arrest. 32 The objective component of the test requires that a reasonable person, standing in the position of the arresting police officer, would have con- cluded that there were reasonable and probable grounds to make the arrest. 33 In the absence of reasonable grounds that the person has committed an offence, the police have no power to arrest a person for the purpose of collecting further evidence. This principle was established by the Ontario Court of Appeal in R. v. Duguay (1985), 18 C.C.C. (3d) 289 (Ont. C.A.), aff’d on other grounds (1989), 46 C.C.C. (3d) 1 (S.C.C.). 34 Cst. Pearson was the police officer who made the decision to have Mr. Richards arrested. His evidence must be analysed to determine whether he had the subjective grounds for directing the arrest of Mr. Richards. The information before Cst. Pearson was: • Cst. Pearson was told by Det. Mohan that Mr. Richards had been the subject of a drug investigation for over two years; • Det. Mohan said Mr. Richards met runners outside of Camrose and Red Deer to supply them with drugs. • Mr. Richards travelled in the Ford F-150 directly to Red Deer, which was one of the places indicated by Detective Mohan where Mr. Richards often met his drug runners; • The short one minute meeting in the Costco parking lot and the immediate return to Calgary; • During the meeting, Mr. Richards exited his vehicle and walked to the GMC Jimmy, with his hands in his pocket, he entered the GMC Jimmy passenger seat for approximately one minute and then immediately returned to the F-150; 370 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

• The seizure of three ounces of cocaine from the GMC Jimmy just subsequent to the Costco meeting between Mr. Richards and the driver of the GMC Jimmy. • Mr. Richards returned directly to Calgary in the F-150 truck after a short stop for gas and driving through a KFC restaurant at Gaso- line Alley. 35 Cst. Pearson testified that “based on the information that he received from Det. Mahon [sic], in regards to Mr. Richards and the trip taken and the short time of the meet, I’d say it was consistent with a drug meet.” As a result of the information, Cst. Pearson testified that he believed he had the necessary reasonable and probable grounds to arrest Mr. Richards. 36 I am entitled to take Cst. Pearson’s experience and training into ac- count in assessing his subjective grounds for the arrest. Cst. Pearson has been with the CPS since May 2005. In February 2013, he was working in the Gang Enforcement Team. Over the course of his five years with Gang Enforcement, Cst. Pearson testified he participated in more than 50 drug investigations or investigations involving drug activity. The scope of the drug investigations varied but he testified they typically targeted higher-level drug investigations. As a general rule, he said he was in- volved in more complex drug investigations. 37 With respect to drug investigations, Cst. Pearson is trained as under- cover operator and also in covert surveillance. He described “covert sur- veillance” as following a suspect in a capacity where the officer would not be observed by the suspect. 38 When I review the evidence provided by Cst. Pearson, I find Cst. Pearson had the requisite subjective belief to arrest Mr. Richards. The information he received, combined with his experience in complex drug investigations and covert surveillance, gave him the requisite reasonable and probable grounds to direct the arrest. 39 Did Cst. Pearson have the objective reasonable grounds to arrest Mr. Richards? In analyzing this question I must determine whether there were objective facts from which a reasonable person could infer that there were reasonable and probable grounds to make the arrest. 40 Recently in R. v. De Jong, 2016 ABQB 116 (Alta. Q.B.), Justice Manderscheid stated at para 59: The objective standard for examining the officer’s subjective belief requires the Court to consider: whether “a reasonable person placed in the position of the officer must be able to conclude that there were R. v. Richards S.L. Hunt McDonald J. 371

indeed reasonable and probable grounds” for forming the opinion that the Accused has committed the offence: Can v Calgary (Police Service), 2014 ABCA 322 at para 3, 560 AR 202 [Can v C(PC)]. The Court should not evaluate the pieces of evidence separately, but “should [determine] whether the circumstances upon which the Crown relied as objective justification for the arrest, considered cu- mulatively, amounted to reasonable and probable grounds for the ar- rest”: R v Bracchi, 2005 BCCA 461 at paras 4, 20-21 [emphasis ad- ded], citing R v Debot (1989), 52 CCC (3d) 193 (SCC) at 206ff. 41 In my view, a reasonable person in the shoes of Cst. Pearson on Feb- ruary 7, 2013, would have formed the reasonable and probable grounds to make an arrest. The objective constellation of factors are listed above. Those factors including the fact that Cst. Pearson was told that Mr. Rich- ards was the subject of a drug investigation for over two years and that he travelled to Red Deer, where he often met drug runners. Further, the short duration of the meet in the Costco parking lot before he headed back to Calgary would lead a reasonable person in Cst. Pearson’s shoes to believe that a drug transaction had taken place. These factors taken together were sufficient in their cumulative effect to constitute reasona- ble and probable grounds to order the arrest of Mr. Richards.

Section 8 - Validity of the Search Warrant; Sufficiency of the Information to Obtain and Legality of the Warrant 42 The police executed the search warrant at Mr. Richards’ residence at 11:55 p.m. on February 7, 2013. The search located drugs, cell phones, cash, bear spray and drug paraphernalia. The police also found a passport belonging to Mr. Richards, and documentation and certificates tying him to the location. 43 Mr. Richards argued that the search warrant was deficient and that the search of his property was therefore warrantless and unreasonable and constituted a breach of his rights under section 8 of the Charter. 44 The warrant in this case was a telewarrant, obtained pursuant to sec- tion 529.5 of the Criminal Code, which states: If a peace officer believes that it would be impracticable in the cir- cumstances to appear personally before a judge or justice to make an application for a warrant under section 529.1 or an authorization under section 529 or 529.4, the warrant or authorization may be is- sued on an information submitted by telephone or other means of telecommunication and, for that purpose, section 487.1 applies, with 372 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

any modifications that the circumstances require, to the warrant or authorization.

The Evidence in the Information to Obtain 45 The ITO is a 17-page document compiled by Det. Mohan. In it Det. Mohan outlines his background as a police officer and his experience in drug-related investigations. He details the foundation on which he be- lieved there were reasonable and probable grounds to search Mr. Rich- ards’ residence on Pantego Way. Det. Mohan prepared the ITO in Cam- rose, Alberta, on February 7, 2013 and submitted it by fax. The ITO was certified by a Justice of the Peace in Edmonton on that date at 10:00 p.m. 46 Section 1 sets out the reasons why Det. Mohan sought a telewarrant; namely that there was no Provincial Court Judge or Justice available, that he was unsuccessful in his attempt to contact the Judge residing in Cam- rose, that other Judges and Justices do not wish to be contacted after hours, and that time was of the essence to prevent the destruction of evidence. 47 Section 2 enumerates the alleged offenses against Mr. Richards and the specific items expected to be located at the search: cocaine, steroid capsules, MDMA powder, capsule pressing machines, packaging materi- als, scales, scoresheets, residency documents, cash (Canadian currency), cellular phones, phone SIM cards, phone billing information, laptops, hard drives and thumb drives. 48 The ITO then details the address and nature of the location that was the subject of the search, as well as Mr. Richards’ name and city of resi- dence. Det. Mohan provides his background as a drug investigator with the Camrose Police Service at paragraphs 1 and 2. He describes the na- ture of his position as investigating, disrupting and suppressing illicit drug trafficking activity in the Camrose area. Paragraph 3 is a brief over- view of the sources for the information presented, and paragraph 4 ex- plains that some of the information in the ITO is generalized or redacted in order to protect identities of informants. Paragraphs 5 and 6 state the reasons Det. Mohan believed the facts in the ITO to be true, including documentation procedures of the Camrose Police Department and the le- gal and moral obligation of every police officer to only relate true events. 49 Paragraphs 7 (a) — (g) provide the details of the databases used in the investigation to identify places of residence, vehicles, involvement with police and criminal records: The Canadian Police Information Centre; the Alberta Motor Vehicle System; The Police Information Retrieval R. v. Richards S.L. Hunt McDonald J. 373

System; Police Reporting and Occurrence System; The Justice Online In- formation Network; the Police Information Management System and the Alberta Government Corporate Registries System. 50 Paragraphs 8 and 9 give another general overview of the alleged of- fenses and CDSA authority. Paragraphs 10 and 11 state that Mr. Richards has been known to Camrose Police since 2008, and that he uses the nick- name or alias “Bean.” 51 In paragraphs 12 - 68 Det. Mohan set out the history of police com- munication with a variety of confidential informants. Between 2009 and 2013 there were a total of 13 informants (Informants “A” — “M”) who spoke with Det. Mohan or another member of the Camrose Police about the drug business conducted by Mr. Richards. These paragraphs detail: a. the sale of crack cocaine, powder cocaine, marijuana and ecstasy; b. shipping of drugs and weapons into Alberta from other provinces; c. arrests of Mr. Richards’ alleged associates; d. seizure of drugs from behind Mr. Richards’ residence, and; e. the locations around Camrose, Alberta where Mr. Richards sells drugs and the area around Camrose “controlled” by Mr. Richards and his crew of drug runners. 52 Det. Mohan went on to detail the events of February 7, 2013, in paragraphs 69-70, consistent with the timeline I have already provided above. 53 Det. Mohan described additional grounds for the warrant in paragraphs 71-94, including the following: a. Mr. Richards’ history of encounters with police and possession of illegal weapons in Nova Scotia; b. Mr. Richards’ criminal record; c. Arrest of Mr. Richards’ brother and police reports that Mr. Rich- ards sent drugs from western Canada to his brother in Halifax, Nova Scotia; d. Confirmation from Bell Mobility that a certain phone number known by the police to be connected to the drug trade in Camrose was registered to Mr. Richards; e. Registration of Mr. Richards’ business, “No Regret Laser Re- moval” at the same address as the property in Calgary named on the ITO as the dwelling house the police intended to search; 374 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

f. Previous police surveillance and observations conducted by Det. Mohan and 12 other members of the Calgary and Camrose police forces of Mr. Richards’ associates and Mr. Richards himself at that property, and; g. Various vehicles registered to Mr. Richards and his associates at that property. 54 Det. Mohan concluded the ITO by highlighting the relevant reasona- ble grounds on which he believed the offences charged had taken place and why a search of the property detailed in the ITO would reveal a large quantity of evidence relevant to the charges under the CDSA. He listed the following grounds for why it was necessary that the execution of the search warrant take place at night, without the police announcing their entry. Det. Mohan wrote as follows: a. There is an imminent threat to the members conducting the search and the destruction of vital evidence. b. Should the warrant not be executed with a night time provision, vital evidence will be destroyed. c. Should this condition not be granted, the loss of vital evidence and injuries to the members involved could occur. d. In the context of Controlled Drugs and Substances Act investiga- tions, Detective Mohan stated, “it has been my experience that often those involved in drug trafficking often have access to weap- ons in the event that they are encountered by law enforcement per- sonnel or other drug rivals. Unannounced entry is imperative in preventing injuries to officers and subjects. As well, it has also been my experience that when encountered by law enforcement personnel, those involved in drug activities will make attempts to destroy drugs and other trafficking related materials in order to evade being charged with serious offences, which carry lengthy periods of incarceration if convicted. Unannounced entry is imper- ative in order to prevent the destruction of vital evidence pertinent to this investigation.” 55 The evidence in the ITO falls into two categories. Ultimately the re- viewing judge must consider the evidence as a whole rather than in a piecemeal fashion, though it is necessary to recognize these categories for the legal assessment of the evidence later on. 56 The first category is the informer-based evidence. According to the ITO, the earliest information regarding Mr. Richards’ drug activities was R. v. Richards S.L. Hunt McDonald J. 375

provided to the Camrose Police Department by Informants A and B in January 2009. Informant B spoke with Det. Mohan directly. Informant A spoke to Sergeant Corbett of the Camrose Police Department, who made a report of the conversation. Det. Mohan reviewed that report in Decem- ber 2011. Informants C and D spoke directly with Det. Mohan in March and April 2009, while Informant E and F’s information was recorded in a report by Sgt. Corbett in April 2009, and was reviewed by Det. Mohan in December 2011. Informants G and H were initially in contact with Sgt. Brisson and Sgt. Fraser of the Camrose Police Department in June and September of 2009. Det. Mohan later spoke to Informant G himself, and reviewed the reports of Sgt. Brisson and Sgt. Fraser. Informants I and K spoke with Det. Mohan in June 2010 and May 2011, respectively, while Informant J spoke to Cst. McDonald of the Camrose Police Department. Det. Mohan reviewed Cst. McDonald’s report. The final Informants, L and M, communicated with Cst. Steil of the Camrose Police Department in March and December 2012, respectively. Those reports were reviewed by Det. Mohan on February 7, 2013, the date the ITO was written. 57 Some of the informants, particularly C and K, provided information to Det. Mohan on multiple occasions between May 2011 and January 2012. 58 The second category of evidence Det. Mohan points to in the ITO are the observations of 12 police officers made between July 2012 and Feb- ruary 2013. Det. Mohan offered this information in support of the details about Mr. Richards’ activities provided by the informants. Det. Mohan also drew on his own experience in investigating “a multitude of mid-to- high level drug dealers,” to draw conclusions on the nature of the evi- dence he presented. Essentially, Det. Mohan alleged there was a nexus between Mr. Richards, the dwelling house for which the warrant was sought and the trafficking of prohibited substances.

Cross Examination of Det. Mohan 59 The ITO formed the basis for the warrant to search Mr. Richards’ residence. While cross-examination of the affiant of an ITO is not auto- matically available, if there is a basis for the view that “the cross-exami- nation will elicit testimony tending to discredit the existence of one of the preconditions of the authorization” then a cross-examination is war- ranted: R. v. Garofoli, [1990] 2 S.C.R. 1421 (S.C.C.) para 112; R. v. Lis- ing, [2005] 3 S.C.R. 343 (S.C.C.) at para 10. 376 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

60 Det. Mohan was cross-examined on the ITO, though the cross-exami- nation was limited to questions aimed at attacking the basis for issuing the warrant. Because the warrant was issued via fax by a Justice of the Peace in Edmonton, Det. Mohan did not swear a formal oath when the application was made. He was clear in his evidence, however, that the assertions made in the ITO were binding on his conscience as if they had been sworn to. 61 Det. Mohan made two warrant applications on the evening of Febru- ary 7, 2013. The first application was submitted at 7:13 p.m. He received a rejection notice from the Justice of the Peace at 9:00 p.m. The rejection notice cited “Appendix ‘A’ not part of sworn Information to Obtain, no reasons for night entry.” He went on to make the necessary changes to the second draft of the ITO; namely, to include “Appendix ‘A’” in the proper main section of the ITO rather than attaching it as an Appendix, and to give reasons for night entry. Det. Mohan re-used the original fax cover sheet from the first application when sending the second applica- tion. In amending the application, he forgot to change the entry on the coversheet that asks whether there had been any previous warrant appli- cations. I am satisfied that this was mere oversight, and was not inten- tional on the part of Det. Mohan. 62 The second application was successful. On the issuing page of the ITO containing the signature of the Justice of the Peace, the box indicat- ing that “a prior application has been made in this matter” was ticked. The issuing justice was therefore aware that the ITO application was not the first in the matter. 63 In cross-examination Det. Mohan gave further evidence on Cst. Mc- Donald, who authored one of the reports cited in the ITO. He was aware at the time he wrote the ITO that Cst. McDonald had been suspended from duty and that there was an investigation underway regarding Cst. McDonald’s suspension. Det. Mohan was not aware of the precise nature of the inquiry, though he believed it was concerned with deceit. He did not know the exact date the suspension began, and stated that the investi- gation was “pretty quiet.” He did not turn his mind to the status of the investigation nor Cst. McDonald’s suspension when mentioning his re- port in the ITO. R. v. Richards S.L. Hunt McDonald J. 377

The Law 64 In order for a search to be valid, some form of prior authorization is required. Under the CDSA, a valid search requires a warrant. Section 11 of the CDSA sets out the requirements for a warrant: (1) A justice who, on ex parte application, is satisfied by information on oath that there are reasonable grounds to believe that: (a) a controlled substance or precursor in respect of which this Act has been contravened, (b) anything in which a controlled substance or precursor referred to in paragraph (a) is contained or concealed, (c) offence-related property, or (d) anything that will afford evidence in respect of an offence under this Act or an offence, in whole or in part in relation to a contravention of this Act, under section 354 or 462.31 of the Criminal Code is in a place may, at any time, issue a warrant authorizing a peace officer, at any time, to search the place for any such controlled sub- stance, precursor, property or thing and to seize it. 65 There is a duty on police to act reasonably and on the issuing Justice of the Peace to act judiciously when granting a warrant. The starting pre- sumption of a reviewing court is therefore that a warrant is valid. The onus is on the party challenging the warrant to establish invalidity: Qu´ebec (Procureur g´en´eral) c. Laroche, 2002 SCC 72 (S.C.C.) at para 88. 66 A police search will be lawfully valid if there are “reasonable and probable grounds, established upon oath, to believe that an offence has been committed and that there is evidence to be found at the place of the search,” Canada (Director of Investigation & Research, Combines Investigation Branch) v. Southam Inc., [1984] 2 S.C.R. 145 (S.C.C.) at para 43. This is the minimum standard required for a search to be valid under section 8 of the Charter. Suspicion and speculation are not sufficient. 67 The standard of proof to assess reasonable grounds for a search is “reasonable probability rather than proof beyond a reasonable doubt,” R. v. Debot, [1989] 2 S.C.R. 1140 (S.C.C.) at para 54. This standard has also been described as “credibility-based probability,” which requires the ITO to disclose “a substantial basis for the existence of the affiant’s be- lief,” R. v. Morris, 1998 NSCA 229 (N.S. C.A.) at para 31. 378 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

68 When reviewing a warrant’s underlying ITO, a reviewing court should consider the following principles as summarized by Fish J in R. v. Morelli, 2010 SCC 8 (S.C.C.): [40] In reviewing the sufficiency of a warrant application, however, “the test is whether there was reliable evidence that might reasonably be believed on the basis of which the authorization could have is- sued” (R v Araujo, 2000 SCC 65, [2000] 2 SCR 992, at para 54 (em- phasis in original)). The question is not whether the reviewing court would itself have issued the warrant, but whether there was sufficient credible and reliable evidence to permit a justice of the peace to find reasonable and probable grounds to believe that an offence had been committed and that evidence of that offence would be found at the specified time and place. [41] The reviewing court does not undertake its review solely on the basis of the ITO as it was presented to the justice of the peace. Rather, “the reviewing court must exclude erroneous information” included in the original ITO (Araujo, at para. 58). Furthermore, the reviewing court may have reference to “amplification” evidence — that is, additional evidence presented at the voir dire to correct minor errors in the ITO — so long as this additional evidence corrects good faith errors of the police in preparing the ITO, rather than deliberate attempts to mislead the authorizing justice. 69 The Supreme Court is clear that a reviewing court must not quash a warrant simply because it would not have issued the warrant. A warrant should only be quashed if the reviewing court considers the totality of the evidence and finds there was no valid basis upon which the warrant could have been issued in the first place. 70 Like any affiant on an ex parte application, the officer who swears the ITO is under a duty of full and frank disclosure. The officer must not “pick and choose” among the relevant facts to produce a favourable nar- rative; rather the obligation is to disclose all material facts, favourable or not. The only permissible omissions are irrelevant or insignificant de- tails: Morelli para 58. 71 Ultimately, the reviewing judge must consider all the evidence that was available to the issuing Justice of the Peace and contextually analyze the ITO as a whole. Piecemeal evaluation of the evidence is insufficient, “because each piece of evidence colours the other pieces... and a fuller picture emerges by considering all of the evidence together”; R. v. Clow, 2012 ABQB 656 (Alta. Q.B.) at para 19. R. v. Richards S.L. Hunt McDonald J. 379

72 Because a reviewing judge does not engage in a de novo assessment of the evidence provided in support of the warrant, validity can be chal- lenged on facial and sub-facial basis. A facial validity challenge requires examination of the ITO and a determination whether, on the face of the information disclosed, the Justice of the Peace could have issued the war- rant: R. v. Araujo, 2000 SCC 65 (S.C.C.) at para 19. Neither the ITO nor any other record can be amplified on a facial examination: R. v. Wilson, 2011 BCCA 252 (B.C. C.A.) at para 39. 73 Sub-facial challenges go behind the form of the ITO to attack the reli- ability of its content: Araujo at para 50; Wilson at para 40. “Sub-facial challenges involve an amplified record, but do not expand the scope of review to permit the reviewing judge to substitute his or her view for that of the authorizing judicial officer”: R. v. Sadikov, 2014 ONCA 72 (Ont. C.A.) at para 38; Araujo at para 51.

Issues 74 There are numerous issues at play in assessing validity of the ITO and the subsequent search warrant: Facial Validity: a. Was there reliable evidence in the ITO, which might reasona- bly be believed, on the basis of which the warrant could have been authorized? b. Based on the totality of the circumstances does the evidence revealed in the ITO meet the statutory requirements set out in section 11 of the CDSA for issuing the warrant? c. Does the ITO disclose reasonable and probable grounds to believe that items related to the offence would be found at the dwelling house? Sub-Facial Validity a. Does the ITO written by Det. Mohan, excised of any mislead- ing or erroneous information, altered so as to include any rel- evant information improperly omitted, and amplified, if nec- essary, on review, provide the reasonable grounds required to issue a warrant for a search of Mr. Richards’ home?

Discussion 75 For the reasons discussed below, I find that the ITO contained suffi- cient evidence such that the Justice of the Peace validly issued the search warrant on February 7, 2013. The search of Mr. Richards’ home was 380 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

therefore warranted and reasonable and did not breach his rights under section 8 of the Charter. 76 I also note that this was a telewarrant application; therefore Det. Mohan did not formally swear the ITO as he would have done if he ap- peared before the issuing Justice in person. I accept that Det. Mohan was aware and mindful of the duty of a police officer to be true and accurate in preparing an ITO.

Facial Validity 77 As discussed above, assessing a warrant on its face or surface level restricts the reviewing judge to consider only the information that was available to the issuing Justice of the Peace. The evidence called on the voir dire cannot be considered; rather the analysis is limited to the infor- mation provided in the ITO to determine if there was sufficient credible and reliable evidence for the Justice to have issued the warrant. 78 The defence challenges the ITO on the grounds that it provided insuf- ficient reliable evidence for connecting the offence alleged and the things to be found at the dwelling house. It argues that the ITO therefore failed to disclose the requisite reasonable grounds to justify the issuance of a search warrant. Defence further argues the information in the ITO was vague, dated, unsubstantiated and of little to no probative value. It points to issues such as narrative form, inclusion of the criminal histories of Mr. Richards and some of his associates, and offender generalization as being particularly problematic. 79 The Crown argues that the ITO it is sufficient when examined in its totality, and that it contains reliable evidence on which the Justice of the Peace could have issued the warrant. Specifically the Crown refers to the cumulative strength of informer information, received month after month, which the Crown argues when, considered together, and is inter- nally corroborative. 80 While I appreciate counsels’ submissions on the above points, I have focused my analysis on the reliability of second-hand police reports and of informant information. These areas form the majority of the ITO now before me, and informant evidence in particular is the subject of signifi- cant discussion in the relevant case law. 81 I agree with the Crown that, on its face, the ITO details sufficient evidence such that the issuing Justice could have relied upon in granting the warrant. Det. Mohan included some second-hand information he ob- tained from other officers’ reports, but such hearsay evidence is permis- R. v. Richards S.L. Hunt McDonald J. 381

sible in ITOs so long as the investigator discloses the source of the evi- dence so its weight can be assessed. 82 The case law states that if the source of ITO evidence is a report com- piled by a different officer, the affiant should provide details outlining the nature of the report, how the information was obtained and why it should be considered credible and reliable; see Restaurant Le Cl´emenceau Inc. v. Drouin, [1987] 1 S.C.R. 706 (S.C.C.) at para 7. It is apparent from the analysis in Drouin that where the facts are not dis- closed within the ITO, the judge has nothing to verify the reasonableness of the belief. It must be supplied by admissible evidence. 83 In R. v. Pastro, [1988] S.J. No. 412 (Sask. C.A.), the Court ruled on the sufficiency of the material to justify a warrant under the then Nar- cotic Control Act. Vancise J stated at para 58: It is not enough that the police officer swears he has reasonable and probable grounds for so believing the facts stated. There must be facts given on oath from which the justice can judicially satisfy him- self that there are rational grounds for the requisite belief. 84 I am satisfied as to the reliability of Det. Mohan’s description of the second-hand reports relied upon in the ITO. In each instance, he specifies the date on which he read each report and who authored it. He also in- cluded the date the report was written. Valid issuance does not require more than this; indeed, it is necessary for an ITO affiant to synthesize and convey evidence in a concise manner. No further details were necessary. 85 The Supreme Court in Garofoli discussed the requirements for relia- bility of an ITO when the ITO affiant relied on information obtained from an informant. The reliability of the information must be apparent and is to be assessed in light of the totality of the circumstances. The relevant principles are set out at paras 81-86: (i) Hearsay statements of an informant can provide reasonable and probable grounds to justify a search. However, evidence of a tip from an informer, by itself, is insufficient to establish reasonable and probable grounds. (ii) The reliability of the tip is to be assessed by recourse to “the total- ity of the circumstances”. There is no formulaic test as to what this entails. Rather, the court must look to a variety of factors in- cluding: (a) the degree of detail of the “tip”; 382 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

(b) the informer’s source of knowledge; (c) indicia of the informer’s reliability such as past perform- ance or confirmation from other investigative sources. (iii) The results of the search cannot, ex post facto, provide evidence of reliability of the information. 86 The requirement set out in step (ii) above strengthens the reliability of the informant information in this ITO which would otherwise be rela- tively weak evidence. The lack of contemporaneity between the date of the warrant application and the discussions with some of the informers is significant. Assessed individually, the evidence of the informants is not very probative. However, I am required to assess reliability of the in- formant information in the “totality of the circumstances.” This means that I must acknowledge the links and commonalities between the evi- dence of many of the informers. The details that Mr. Richards was a high-up figure in the Camrose and surrounding area drug trade, that he trafficked drugs inter-provincially, that he used various cell phone num- bers, that he employed runners, that he used aliases and that he tended to move around often were all independently corroborated by Informants C, K and I. 87 It is true that the information provided by some of the informants, as relayed in the ITO, is not heavy in detail. These frailties undoubtedly affect the weight that can be placed on the individual pieces of informa- tion. But none of these frailties necessarily result in the information hav- ing no value. The law does not mandate an approach to the assessment of reasonable grounds where each individual piece of evidence is weighed in a vacuum: see R. v. Wynter, 2016 ONSC 143 (Ont. S.C.J.) at para 38; R. v. Caissey, 2007 ABCA 380 (Alta. C.A.) at paras 12 and 24. 88 While several portions of the ITO were vetted or redacted, I do not find those portions affect the overall reliability of the ITO. Considered as a whole, there is a strong link of continuity that connects the informant evidence. Further, Det. Mohan included in the ITO details that, in some cases, the same informant information had led to successful arrests and convictions of other persons in the drug trade. These facts add to the credibility and reliability of informant details which may otherwise ap- pear insignificant. 89 I find the details in the ITO regarding the surveillance by police of Mr. Richards’ activities and accomplices to be probative and reliable in- formation. Det. Mohan was thorough in his review and provided the names and ranks of twelve individual officers who were involved in the R. v. Richards S.L. Hunt McDonald J. 383

various surveillance efforts. The details provided are anything but vague, and add to the overall strength of the ITO evidence by setting a strong historic context for the events which took place on February 7, 2013. 90 Finally, I find that Det. Mohan’s review of the events of February 7, 2013, is reliable and credible evidence. It was very recent; he compiled it on the same day that the application for the warrant was made. The de- tails are well set out and reliable, as Det. Mohan was himself involved in some aspects of the day’s activities. When he was not personally present, Det. Mohan was able to provide details of the officers who were involved. 91 I am satisfied that there was a sufficient nexus between the events of February 7, 2013, as relayed in the ITO, and the evidence the police ex- pected to discover to support the necessary standard of reasonable and probable grounds for the search. 92 This analysis is focused on reviewing the ITO as a whole. I must re- ject any suggestion to part and parcel the informant evidence from the surveillance evidence, and so on. The approach described in Debot and Garofoli does not suggest that an unsourced tip, or a tip from an untested informant invariably has no value. The value of a tip can only be evalu- ated upon an examination of all of the circumstances. The current state of the law in this regard was succinctly stated by Dambrot J in R. v. Riley, [2009] O.J. No. 738 (Ont. S.C.J.) at para 126: The totality of the circumstances approach endorsed by the Supreme Court generally, and in relation to informant information in particu- lar, does not require me, as the reviewing judge, to examine each piece of information provided by each of the informants individually and consider whether each is sufficiently sourced, detailed or other- wise shown to be reliable to be taken into account in assessing the existence of reasonable and probable grounds. Fulfilling such a task in the circumstances of this application would be endless, and I will not pretend to have done it. 93 The information provided in the ITO is, on its face, more than suffi- cient to meet the requisite reasonable and probable grounds for validity.

Sub-facial Validity 94 A sub-facial challenge permits the reviewing judge to look at the fac- tors behind the ITO to assess the validity of its contents. The evidence heard on voir dire must be considered in determining whether to amplify 384 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

the ITO with material that was missing or excise incorrect or misleading evidence that was initially included by the affiant. 95 Excision is a remedy at the discretion of the reviewing judge to re- move erroneous or illegally obtained evidence that was included in the ITO and which justified the issuance of the warrant by the Justice of the Peace. Amplification is the opposite; it is the consideration of additional evidence presented at the voir dire to correct minor errors in the ITO: Morelli para 41. Amplification requires a delicate balance, because if taken too far it risks circumventing the Charter requirement of prior au- thorization for a warrant: Araujo para 59. Amplification must only cor- rect good faith errors of the police in preparing the ITO, rather than de- liberate attempts to mislead the authorizing Justice. 96 The test for assessing validity of a warrant on a sub-facial challenge was set out by Sopinka J in Garofoli: If, based on the record which was before the authorizing judge as amplified on the review, the reviewing judge concludes that the au- thorizing judge could have granted the authorization, then he or she should not interfere. In this process, the existence of fraud, non-dis- closure, misleading evidence and new evidence are all relevant, but, rather than being a prerequisite to review, their sole impact is to de- termine whether there continues to be any basis for the decision of the authorizing judge. 97 The defence submits Det. Mohan knew or ought to have known that the report by Cst. McDonald of the Camrose Police Service was not a reliable source. Defence further points out that the duty of frank and full disclosure means that the unreliable nature of this information ought to have been included in the ITO so it could have been considered by the reviewing Justice of the Peace. Defence also argues that evidence of traf- ficking from the search of the GMC Jimmy does not amount to grounds to search a residence; that without more on amplification review, an issu- ing Justice could not conclude that drugs were being stored at a residence. 98 The Crown states that the standard of diligence on the part of the affiant of an ITO is not so high as to have required Det. Mohan turn his attention to the allegations against Cst. McDonald. It further submits that the nexus is strong between surveillance of Mr. Richards leaving the dwelling house and driving to the Red Deer meeting with the GMC Jimmy, and the subsequent seizure of drugs from the GMC Jimmy. R. v. Richards S.L. Hunt McDonald J. 385

99 I cannot agree with defence counsel that Det. Mohan was required to turn his mind to the background of each police officer whose reports were cited in the ITO. I am not convinced that, had the issuing Justice been aware that Cst. McDonald was at the time of issuance under some sort of review, he would have on that basis alone refused to issue the warrant. Only one informant, “Informant J,” was reported by Cst. Mc- Donald. The remaining 12 informants were either spoken to by Det. Mohan directly, or were in contact with officers other than Cst. McDonald. 100 Perhaps, if all of the reports of informant communication relied on by Det. Mohan were authored by Cst. McDonald, the issue would loom larger before the issuing Justice and before me on review. That is not, however, the case before me. The standard remains whether there were reasonable and probable grounds; the outcome of one police officer’s subsequent employment history with the police force is not necessarily determinative. 101 While the record before me was slightly amplified by Det. Mohan’s evidence on cross-examination that he was aware of some disciplinary action with regard to Cst. McDonald, I accept that he did not turn his mind to it when authoring the ITO. I do not find this evidence to affect the overall reliability of the evidence in the ITO. 102 Finally, I do not find the inclusion of the evidence retrieved from the GMC Jimmy to be problematic. Read in context of Det. Mohan’s ac- count of the events of February 7, 2013, it follows that a description of what was seized from the GMC Jimmy would be included in the ITO. I do not find it necessary to amplify this information with any further evi- dence upon review.

Conclusion 103 Overall, I am satisfied that the ITO provided the issuing Justice of the Peace with reliable and credible evidence. There were sufficient reasona- ble and probable grounds to lawfully issue a warrant. The search of Mr. Richards’ home was therefore reasonable and there was no breach of his section 8 rights under the Charter.

Section 10(b) - Right to Counsel 104 Section 10(b) of the Charter states: 10. Everyone has the right on arrest or detention... 386 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

(b) to retain and instruct counsel without delay and to be informed of that right; 105 The defence contends that Mr. Richards’ section 10(b) right was vio- lated when the police did not allow him to contact his lawyer subsequent to his arrest. 106 The Crown conceded that Mr. Richards’ section 10(b) right was breached while he was in police custody at Westwinds on February 7, 2013, under the supervision of Cst. Kelly. However, there is disagree- ment between Crown and defence as to the length of the delay; defence argued that the delay began upon arrest at 3:31 p.m., while the Crown argued it began after the “very public” arrest of Mr. Fader at 5:45 p.m. This is a difference of about two hours and 15 minutes. The Crown main- tains that the delay between 3:31 p.m. and 5:45 p.m. was justified on the basis of the “exceptional circumstance” of needing to maintain continuity of the Pantego Way residence of Mr. Richards by ensuring no one was allowed to enter or leave the residence. 107 Section 10(b) of the Charter gives every person the right to retain and instruct counsel without delay, and to be informed of this right upon ar- rest. In R. v. Bartle, [1994] 3 S.C.R. 173 (S.C.C.), Lamer CJ explained why the right to counsel must be facilitated without delay at para 17: The purpose of the right to counsel guaranteed by s. 10(b) of the Charter is to provide detainees with an opportunity to be informed of their rights and obligations under the law and, most importantly, to obtain advice on how to exercise those rights and fulfil those obliga- tions: R. v Manninen, [1987] 1 S.C.R. 1233, at pp. 1242-43. This opportunity is made available because, when an individual is de- tained by state authorities, he or she is put in a position of disadvan- tage relative to the state. Not only has this person suffered a depriva- tion of liberty, but also this person may be at risk of incriminating him- or herself. Accordingly, a person who is “detained” within the meaning of s. 10 of the Charter is in immediate need of legal advice in order to protect his or her right against self-incrimination and to assist him or her in regaining his or her liberty: Brydges, at p. 206, R v Hebert, [1990] 2 S.C.R. 151, at pp. 176-77, and Prosper. Under s. 10(b), a detainee is entitled as of right to seek such legal advice “without delay” and upon request. As this court suggested in R v Clarkson, [1986] 1 S.C.R. 383, at p. 394, the right to counsel pro- tected by s. 10(b) is designed to ensure that persons who are arrested or detained are treated fairly in the criminal process. R. v. Richards S.L. Hunt McDonald J. 387

108 The corresponding duties on police to facilitate section 10(b) were originally set out in R. v. Manninen, [1987] 1 S.C.R. 1233 (S.C.C.) at para 21. The police must advise the arrestee of his or her 10(b) right. This is the informational component of the duty on police. The police must also provide the individual with a reasonable opportunity to exer- cise the right. This requires the police to facilitate contact with counsel by providing the accused with a telephone and reasonable privacy. This is the implementation aspect of the duty. The police are also under a duty to cease or avoid any questioning the arrestee and must not elicit evi- dence from the individual until he or she has had a reasonable opportu- nity to retain and instruct counsel. 109 Where access to counsel is not immediately provided, the burden is on the Crown to justify the delay: R. v. Taylor, 2014 SCC 50 (S.C.C.) at para 24. Lamer J, as he then was, acknowledged at para 22 of Manninen that there may be instances when “urgent” circumstances interrupt the facilitation of the right to counsel. In R. v. Suberu, 2009 SCC 33 (S.C.C.), the Court recognized that safety concerns must be taken into account in assessing a delay in access to counsel. The Court stated at para 2: “The immediacy of this obligation is only subject to concerns for officer or public safety, or to reasonable limitations that are prescribed by law and justified under s. 1 of the Charter.”

Length of Delay 110 It is accepted that the suspension of the right to counsel may be justi- fied in some special circumstances: if the security of the police or the public is threatened, if there is an imminent risk that evidence would be destroyed or lost or that another ongoing police operation could be jeop- ardized: R. c. Archambault, 2012 QCCA 20 (C.A. Que.) at para 26. 111 Police justifications must be closely assessed on a case-by-case basis. In R. v. Heng, 2014 ABCA 325 (Alta. C.A.), the Court of Appeal empha- sized at para 11 the importance of determining whether a delay is in fact justified, or whether it is police practice to withhold counsel: The trial judge made no finding on whether denying the appellant access to counsel pending execution of the search warrant was a gen- eral policy or a one-off decision (and, if the latter, whether it was justified in this case by exceptional circumstances)...It might well be a significant factor in assessing the bona fides of police conduct: R v Saeed, 2014 ABCA 238 at para 68, [2014] AJ No 739 (QL); R v Patterson, 2006 BCCA 24 at paras 40-42, 206 CCC (3d) 70 [Patter- son]. More particularly, it bears on whether the breach in this case 388 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

reflected a willful or reckless (and as such grave) disregard of Char- ter rights, and on whether it implicates systemic or institutional problems: R v Harrison, 2009 SCC 34 (CanLII) at para 25, [2009] 2 SCR 494; R v Harrison, 2008 ONCA 85 (CanLII) at para 60, 89 OR (3d) 161. 112 General concerns or vague reasons provided by police for withhold- ing the right to counsel will not be acceptable justification. At para 29 of Archambault, the Quebec Court of Appeal upheld the trial judge’s find- ing that the accused’s section 10(b) right was breached. The police in that case attempted to justify the delay because they feared that such con- tact would put the ongoing police investigation at risk. The police be- lieved that the preservation of certain evidence would be threatened if the respondents were able to contact their lawyer. These reasons, while hav- ing the benefit of being candid, had no basis; see para 37. There was no specific evidence to support the fear that officer safety was at risk or that evidence may be destroyed; rather the police attempted to justify the de- lay by referring to past experience when such events did occur. The Court of Appeal affirmed the following paragraph from the trial decision, 2010 QCCQ 4710 (C.Q.): [24] The authorities do not support the existence of a discretionary power in the police to suspend the right to counsel of a person whom they have arrested for tactical considerations related to the advance- ment of an investigation by other means. Unless there are exigent circumstances of urgent and pressing necessity, the police are obliged to comply with section 10(b) according to its terms as interpreted by the jurisprudence. Quite apart from the authorities, however, I cannot readily imagine a point of principle that would justify the existence of an ancillary power to suspend the right to counsel for tactical rea- sons. That right exists to ensure the availability of prompt assistance to those whom the state has put in jeopardy. A power to suspend the right to counsel would imply the ability of the state to put someone in jeopardy by arrest or detention and, at the same time, the power to deny the right to legal assistance of those in conspicuous need. 113 Cst. Kelly is a police officer with CPS. At the time of the voir dire, she had been a police officer for 11 years. Currently, she works as a uniformed patrol officer. On February 7, 2013 she was a member of the gang enforcement team and was involved in the surveillance operations and custody of the accused following his arrest. 114 Cst. Kelly’s involvement commenced at approximately 11:30 a.m., shortly after the surveillance was set up. She was tasked with the role of R. v. Richards S.L. Hunt McDonald J. 389

scribe, which meant that she made notes of observations that were aired by team members and specific times in relation to their observations. 115 Cst. Kelly formed part of the surveillance team that went to Red Deer to the Costco parking lot. Her final scribe entry was at 3:32 p.m., which was the traffic stop and arrest of Mr. Richards. At that time she left the surveillance team and attended at the Westwinds Police Campus to take over custody of Mr. Richards. 116 Mr. Richards was brought into the holding area at Westwinds at ap- proximately 4:16 p.m. At that time she read Mr. Richards his Charter rights and advised that he was under arrest for possession for the pur- poses of trafficking in a controlled substance and for possession of the proceeds of crime. She stated during direct examination: When I asked if he understood, he stated, Yes. And when I asked if he wanted to contact a lawyer, he said, Ah yeah. I read the caution following that, and he did not make any — stated he didn’t want to say anything. And I advised him that he would be able to contact counsel pending the entry of the search warrant. 117 During her voir dire testimony, the Crown asked Cst. Kelly about the extent of her knowledge of the status of the investigation at the time she decided to delay Mr. Richards’ right to counsel. She reiterated the sur- veillance timeline from earlier that day, and stated: Based on...information based on the fact that I knew that this was a drug investigation, that a search warrant was being sought, that there was unknown occupants in that residence, I delayed Mr. Richards contact to counsel on the basis that I was concerned that he could make a call to someone other than counsel and, therefore, there would be a risk of destruction of evidence. 118 She then stated: In almost all of the warrants that I have participated in, the Tactical Unit has been ... for the drug warrants, sorry, that I’ve participated in, the Tactical Unit has been utilized. I didn’t know exactly what the tactic they would be using to go in, but I was concerned that if some- body was in the residence, that they may be able to prepare for their entry, and I didn’t know if their safety could be affected with some- body knowing that they were going inside. 119 Shortly before 9:00 pm she became aware that a very public arrest had been made of the fourth person and she felt that the risk of Mr. Rich- ards making a call to anybody to either prepare a safety risk or destroy evidence was not greater than the risk that was now posed because of a 390 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

very public arrest outside of the house. At 9:01 p.m. Mr. Richards was given the opportunity to contact counsel. 120 During this period of time, Cst. Kelly asked him no questions other than if he had any medical concerns. A sandwich and water was offered to him. 121 Although I find Cst. Kelly to be a credible witness, other than these generalities, there were no details provided as to why Cst. Kelly had con- cerns over officer safety or destruction of evidence. As in Archambault, this explanation is insufficient to justify denial of an accused person’s rights under the Charter. Without specific concerns based on actual events surrounding an investigation, the delay cannot be justified. 122 Cst. Kelly admitted during cross-examination that she was not pro- vided with any information that would indicate that Mr. Richards was a dangerous individual and should not be provided with access to counsel on arrest. She was not advised of the very public arrest of an individual at approximately 5:45 p.m. 123 There is some variation in the case law on whether delay in facilita- tion of an accused’s 10(b) right is justified in “reasonable circumstances” or “exceptional circumstances.” Crown and defence disagree as to which of these standards ought to apply in the present case. The Crown cites Taylor, where the standard discussed is whether the delay was reasonable in the circumstances: para 24. In the same year as Taylor, however, the Supreme Court applied the exceptional circumstance standard to deter- mine whether the delay to counsel was justified in R. v. Mian, 2014 SCC 54 (S.C.C.) at para 74. I am inclined to endorse the latter standard, as it is more consistently applied in case law and was applied in early 10(b) ju- risprudence, including Manninen and Strachan. 124 I do not find it necessary, however, to dissect the distinction between reasonable and extraordinary or exceptional circumstances here. Even if the lower standard of reasonable circumstances applies, I do not find Cst. Kelly’s justification for the delay to be reasonable. I certainly do not find the circumstances to have been exceptional. While Cst. Kelly testified that she had concerns for officer safety due to the nature of the investiga- tion, these were general concerns that she was not able to connect to the actual events taking place throughout the delay. She admitted that she made no notes as to the ongoing surveillance or actions of the tactical team, despite being required by law “to prepare accurate, detailed, and comprehensive notes as soon as practicable;” see Schaeffer v. Woods, 2013 SCC 71 (S.C.C.) at para 67. It is not reasonable to delay the right of R. v. Richards S.L. Hunt McDonald J. 391

an arrested person to contact counsel on the basis of an ongoing investi- gation and then fail to follow up with a record of the investigation. 125 The Crown argued that the delay started at 5:45 p.m. when Mr. Fader was arrested, as the delay was justified up to that point on the basis of officer safety and the risk that evidence may have been destroyed. Cst. Kelly testified, however, that she was not aware of this arrest at the time, and only noted Mr. Fader’s arrival at Westwinds at 6:55 p.m. She stated “I don’t recall knowing the specifics of his arrest until — and of the fact that anything public had taken place until I was contacted closer to 9 p.m.” 126 It is inconsistent to argue that the breach started at 5:45 p.m. when the person responsible for the ongoing delay, Cst. Kelly, was not aware of the arrest until hours later. 127 I do note, however, that based on the evidence before me, there was no evidence that Cst. Kelly’s decision to delay the right to counsel was as a result of a standard practice within her team to withhold access to counsel. This has been found in other cases involving the CPS including R. v. Celestin, 2013 ABPC 242 (Alta. Prov. Ct.), However, I decline to make that finding in this case as there is no evidence to support the fact that it was a standard. 128 The defence contends that the breach started immediately upon arrest at 3:31 p.m. Submissions regarding the use of cell phones to contact counsel were made by the defence. There is case law to suggest that po- lice must provide a cell phone to an arrested person in certain circum- stances to facilitate the right to counsel. Here, Mr. Richards was arrested at 3:31 p.m. and did not arrive at Westwinds until 4:19 p.m. Cst. Kelly assumed custody of Mr. Richards at 4:20 p.m. 129 I do not accept that the officers who transported Mr. Richards from the site of the arrest to Westwinds were obliged under the Charter to allow Mr. Richards to use a cell phone to contact counsel. Though de- fence counsel referenced trial decisions from various jurisdictions where the right to use a cell phone was granted, namely R. v. Edwards, 2009 NLTD 167 (N.L. T.D.) and R. v. Camacho, 2011 BCSC 175 (B.C. S.C.), the Supreme Court was clear in Taylor that police are not obliged to pro- vide their own cell phone to an accused to contact counsel. In overturn- ing the Court of Appeal’s ruling that a cell phone ought to have been provided to the accused by police, the Supreme Court held at para 27 of Taylor that “in light of privacy and safety issues, the police are under no legal duty to provide their own cell phone to a detained individual.” 392 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

130 Whether an accused may use his or her own cell phone to contact counsel is less settled. In this case, I am not convinced that the requisite privacy element of 10(b) would have been satisfied if Mr. Richards called counsel while he was in transit from the scene of the arrest to Westwinds. In consulting counsel, detained or arrested persons must be allowed to converse with a lawyer without the conversation being over- heard. The legal rationale for the privacy requirement is straightforward, and was explained by the Ontario Court of Appeal in R. v. Playford, [1987] O.J. No. 1107, 40 C.C.C. (3d) 142 (Ont. C.A.) at para 40: It would defy common sense to expect an accused person to instruct counsel properly when his instructions can be overheard by other persons and in particular by police officers. Such lack of privacy might even seriously prejudice his ability to retain counsel. Retention of counsel usually requires some explanation by the accused of the circumstances which have led to his arrest. ...While contacting coun- sel does not require “absolute privacy,” calling a lawyer from a po- lice vehicle could undermine the privacy accorded to the accused when consulting counsel. 131 Aside from the privacy consideration, courts have also found it rea- sonable to prohibit the use of cell phones by an accused following arrest. In R. v. Montgomery, 2009 BCCA 41 (B.C. C.A.), the British Columbia Court of Appeal upheld the trial judge’s conclusion that it was neither reasonable nor practical to allow the appellant to use a cell phone at the scene of his arrest. The Court stated at para 35: “It would have been difficult for the police to ensure that the call was not used for an im- proper purpose and to provide the appellant with privacy at the scene of his arrest while ensuring that he was secure.” I agree with this assessment. 132 I find that the breach began at 4:20 p.m., the time that Mr. Richards arrived at Westwinds, had been searched and was in Officer Kelly’s cus- tody. The length of the delay is the time that elapsed between 4:20 p.m. and 9:01 p.m., totalling four hours and 41 minutes. 133 Mr. Richards’ right to counsel was violated by the delay. I now turn to whether the impugned evidence should be excluded pursuant to sec- tion 24(2) of the Charter.

Section 24(2) 134 Section 24(2) of the Charter states that where evidence was obtained in a manner that infringes Charter rights, that evidence shall be excluded if it is established that, having regard to all of the circumstances, the ad- R. v. Richards S.L. Hunt McDonald J. 393

mission of the evidence in the proceedings would bring the administra- tion of justice into disrepute. 135 The analysis of whether the evidence ought to be excluded is two pronged; first, I must determine whether the evidence was obtained in a manner that infringed Mr. Richards’ Charter rights. If that query is an- swered in the affirmative, I must go on to balance the factors under sec- tion 24(2) enumerated by the Supreme Court in R. v. Grant, 2009 SCC 32 (S.C.C.). A balance of the Grant factors is used to determine whether the admission of the impugned evidence would bring the administration of justice into disrepute. 136 The defence seeks to exclude the evidence located during the search of Mr. Richards’ home, including his identification documents, con- trolled substances and drug paraphernalia.

A. Was the evidence obtained in a manner that infringed Mr. Richards’ Charter rights? 137 Evidence can be excluded pursuant to section 24(2) only where it has been obtained in a manner that breached the accused’s Charter rights. Here, the 10(b) breach in question occurred for the time period between 4:20 p.m. and 9:01 p.m. on February 7, 2013. The search of Mr. Rich- ards’ home that led to the discovery of the impugned evidence occurred commencing at 11:55 p.m. 138 The connection between the breach and the collection of evidence can be causal, temporal, contextual or a combination of the three: R. v. Wittwer, 2008 SCC 33 (S.C.C.) at para 21, R. v. Plaha, [2004] O.J. No. 3484 (Ont. C.A.) at para 45. A connection that is merely “remote” or “tenuous” will not suffice: R. v. Goldhart, [1996] 2 S.C.R. 463 (S.C.C.) at para 40; Plaha, at para 45. Although a non-remote causal connection between the breach and the discovery of the evidence will satisfy this requirement, a causal connection is not strictly required. Instead, a broad, generous approach is to be taken when courts assess whether the breach and the discovery are part of the same course of conduct by the state. Temporal, contextual and any other relevant factors ought to be consid- ered in this assessment. This is a case-specific inquiry, explained by the Supreme Court in Wittwer at para 21: In considering whether [evidence] is tainted by an earlier Charter breach, the courts have adopted a purposive and generous approach. It is unnecessary to establish a strict causal relationship between the breach and the subsequent statement. The statement will be tainted if 394 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

the breach and the impugned statement can be said to be part of the same transaction or course of conduct. 139 In R. v. Strachan, [1988] 2 S.C.R. 980 (S.C.C.), the police executed a valid search warrant but did not allow the accused to contact counsel until after the search had taken place and the evidence in question was obtained. The Supreme Court found it was too narrow to ask whether access to counsel could have prevented the search from taking place. Rather the fact that the search took place while the Charter infringement was ongoing was sufficient to establish the connection between the viola- tion and the collection of evidence. The Supreme Court affirmed that this broader interpretation of the connection requirement under section 24(2) ought to be favoured in R. v. Debot, [1989] 2 S.C.R. 1140 (S.C.C.) at paras 46-47. 140 In contrast, the Supreme Court in Goldhart found there was no suffi- cient connection between the Charter breach and the evidence obtained where police learned of a witness during an unconstitutional search. That witness’s later testimony was technically a result of the Charter-infring- ing search, but the Court held the connection was too remote to meet the requirement that the evidence was obtained in a manner that violated the Charter. When read together, the case law is clear that the evidence in question must have been tainted by the Charter breach in order to be considered for exclusion under section 24(2). 141 In the case at bar, the crux of the issue is whether the incriminatory evidence was obtained in a manner that breached Mr. Richards’ 10(b) Charter right. While counsel made arguments relating to the Grant fac- tors, it would be improper to consider Grant without first clearing this initial hurdle. Neither Crown nor defence focused on this stage of the inquiry during submissions. While the defence did emphasize that a strict causal connection is not required, no alternative was suggested as to how the nexus could be established. 142 Because this issue is central to the 24(2) analysis in this case, I will go through the causal, temporal and contextual requirements in turn.

i. Did a causal nexus exist? 143 A causal inquiry asks whether the evidence would have been discov- ered if the Charter violation had not occurred: Strachan para 48. Causa- tion is easily established in cases where, for example, right to counsel is denied and the police proceed to interview an accused and elicit a state- ment regarding the location of evidence. In such a case, it could be ar- R. v. Richards S.L. Hunt McDonald J. 395

gued that but for the 10(b) breach, the statement would not have been made and police would not have obtained the evidence: such was the case in Plaha. In R. v. Burlingham, [1995] 2 S.C.R. 206 (S.C.C.), a gun that was discovered as a result of a confession made by the accused to the police after his section 10(b) right was violated was excluded along with the confession itself. The causal nexus between the breach and the discovery of the gun was easily established. 144 In the matter before me, Mr. Richards was not questioned by the po- lice while he was held at Westwinds, prior to being allowed to call his lawyer. There was no information elicited from Mr. Richards regarding the location of evidence or any other aspect of the investigation. I accept the following from Cst. Kelly’s testimony: CROWN: Constable, did Mr. Richards make any requests of you while he was in custody? A Not that I recall, no. Q Before Mr. Richards was allowed to speak to counsel, did you at any time ask him any questions? A Other than if he had any medical concerns, allergies, no. I - Q Did you - A Sorry. Q That’s okay. A He may have asked at some point in use the washroom, which I would have allowed him to do, and a sandwich and water was offered during the evening as well. But, no, I did not ask him any questions. Q Did you ever attempt to elicit any information from him re- garding your investigation? A No. Q Did you come into possession or seize anything during the course of this investigation? A I did not. 145 The timeline of events demonstrates that the search of Mr. Richards’ home took place almost three hours after he was finally granted access to counsel. No action or event that occurred during the delay precipitated or affected the warrant, the search of the residence or the location of evi- dence. No direct causal link exists between the evidence found during the search of the residence and the infringement of Mr. Richards’ 10(b) right. There is no evidence that facilitating Mr. Richards’ right to contact 396 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

counsel earlier would have affected the collection of evidence from his residence. 146 The lack of a direct causal connection is not on its own determinative, however; the law does not require a strict causal link. Further analysis is necessary to determine whether a temporal or contextual nexus exits be- tween the impugned evidence and the breach.

ii. Did a temporal nexus exist? 147 Assessing whether there is a temporal connection between a Charter breach and the collection of evidence requires more than “simply count- ing the minutes or hours” between the two: Plaha at para 49. Events that occur during the time interval can colour the significance of the passage of time. 148 The sufficiency of a temporal nexus is necessarily a case-by-case as- sessment. The Supreme Court in Strachan noted that, with regard to tem- poral sequence, “all evidence gathered following a violation of a Charter right, including the right to counsel, is within the scope of s. 24(2)” para 54. However the nexus cannot be too remote, as the Court noted at para 55: The presence of a temporal connection is not, however, determina- tive. Situations will arise where evidence, though obtained following the breach of a Charter right, will be too remote from the violation to be “obtained in a manner” that infringed the Charter. 149 In the case at bar, the temporal connection is remote. While the search and collection of evidence did occur after the Charter breach, al- most three hours elapsed between the end of the breach at 9:01 p.m., when Mr. Richards called his lawyer, and when the police executed the search warrant at 11:55 p.m. Further, while occurrences during the inter- val should be considered toward a temporal nexus, there is no evidence that anything of consequence took place between 9:01 p.m. and 11:55 p.m. The first telewarrant application had failed, and so the second appli- cation was made at 9:40 p.m. According to Cst. Kelley, Mr. Richards had just completed his call to counsel at that same time. 150 In cases involving section 10(b), the accused’s eventual contact with counsel, even if delayed, can break the temporal chain and sever the nexus between the breach and the collection of evidence. 151 In Ouellette c. Nouveau-Brunswick (1996), 2 C.R. (5th) 223 (N.B. C.A.), no temporal connection was found. Ouelette was denied his right to counsel upon arrest and so his 10(b) right was breached. However, he R. v. Richards S.L. Hunt McDonald J. 397

eventually spoke with counsel, and afterward provided the police with a breath sample. That evidence was admissible because once Ouelette spoke with counsel the chain connecting the breach to the evidence was broken. The same reasoning was used to include evidence of a DNA sample provided by the accused in R. v. S. (S.), 2008 ONCA 578 (Ont. C.A.). In effect, once the breach is over and the accused has contacted counsel, the taint on subsequently discovered evidence is gone. 152 In R. v. Vuozzo, 2010 ABQB 437 (Alta. Q.B.), Hughes J of this Court found that the accused had been arbitrarily detained by police, which amounted to a breach of his section 9 right under the Charter. The ac- cused confessed to an undercover police officer two days following the breach. Though 10(b) was not at issue, Hughes J had to determine whether there was a sufficient nexus between the Charter breach and the confession evidence. Ultimately she found that there was no causal con- nection, and a temporal connection was too remote to satisfy the require- ment that the impugned evidence was “obtained in a manner” that vio- lated the accused’s Charter rights. On appeal, the Court of Appeal made the following comments on Hughes J’s finding on this issue: “The trial judge... ultimately concluded that the evidence was not obtained in a manner that required a s. 24(2) analysis... The trial judge did not err in declining to find a link between the traffic stop ruse and the appellant’s statements to the ‘boss’” R. v. Vuozzo, 2013 ABCA 130 (Alta. C.A.), paras 67-68. 153 I cannot find a sufficient temporal connection between the breach and the discovery of evidence in Mr. Richards’ case.

iii. Did a contextual nexus exist? 154 Absent a sufficient causal or temporal nexus between the breach and the collection of evidence, little weight can be given to a contextual con- nection. Rather a contextual analysis may strengthen an otherwise weak causal or temporal connection. 155 A contextual nexus requires that the breach and the evidence be “part of the same transaction” or chain of events: R. v. Wittwer, para 21. Logi- cally, such a transaction or chain would also involve some causal or tem- poral connection. In R. v. S. (S.) at para 66 the Court found the contextual nexus to be strong: That interview which encompassed both the Charter breach and the giving of the sample was conducted by the same officers in the same place. The officers had the same agenda throughout the interview. 398 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

156 In R. v. S. (S.) there was no event that severed the continuity between the breach and the collection of the accused’s saliva sample. In the con- text of the breach of Mr. Richards’ right to counsel, Cst. Kelly was not aware of the progress of the police team attempting to secure a warrant. She did not make inquiries into the status of the warrant. Indeed, even at 9:01 p.m. when Cst. Kelly finally permitted Mr. Richards to call counsel, the warrant to search his residence had not been approved. Other than the arrests of Mr. Fader and Mr. Furey, which she only learned about hours after they had taken place, Cst. Kelly was not aware of the details of the ongoing investigation. 157 The Court of Appeal in Archambault ultimately overturned the trial judge’s exclusion of the evidence, despite upholding the finding that there was a breach. The Court of Appeal stated that there was no suffi- cient connection between the breach and the discovery of the evidence. As in this case, the evidence in Archambault was discovered as a result of the search of a residence, unrelated to the 10(b) breach: “[The fire- arms] were discovered through the execution of search warrants that are not connected to the violation of the right to counsel. Therefore, there is no causal link and they cannot be excluded;” para 47. 158 Overall, applying the generous and purposive approach to whether the evidence was obtained in a manner that breached Charter rights, I cannot find that the requisite nexus existed between the 10(b) breach and the evidence found at Mr. Richards’ home. While lack of a causal link can be mollified by a temporal and contextual connection, no such con- nection was present in this case. Mr. Richards’ residence was under po- lice surveillance; they knew where he lived before he was arrested, and did not elicit any information from him whatsoever once he was in cus- tody that was used to obtain the warrant. Indeed, aside from offering him food and access to the washroom, no member of the CPS spoke to Mr. Richards during the hours he was denied counsel. Further, the search that located the impugned evidence occurred almost three hours after Mr. Richards called his lawyer. 159 Taken together, there is no way to connect the breach of Mr. Rich- ards’ section 10(b) right to the evidence that the police eventually seized from his residence. The evidence was not obtained in a manner that in- fringed the Charter, and it is therefore not eligible for exclusion under section 24(2). R. v. Richards S.L. Hunt McDonald J. 399

Failure to File a Report to Justice 160 Section 487.1 of the Criminal Code specifically requires that a Report to Justice (Form 5-2) be filed where a telewarrant is issued. The applica- ble section of the telewarrant provisions provides as follows: 487.1 (1) Where a peace officer believes that an indictable offence has been committed and that it would be impracticable to appear per- sonally before a justice to make application for a warrant in accor- dance with section 256 or 487, the peace officer may submit an infor- mation on oath by telephone or other means of telecommunication to a justice designated for the purpose by the chief judge of the provin- cial court having jurisdiction in the matter. 161 Det. Mills was employed in the Guns and Gang unit on February 7, 2013. His responsibilities were to investigate organized crime files, files involving gangs and also larger scale drug and even smaller drug files. On February 7, 2013, he was assigned to assist with a search warrant as part of an ongoing investigation. He assisted with the search in the resi- dence on Pantego Way. Prior to the search, Det. Mills also assisted in the surveillance of the residence. Det. Mills then assisted with two arrests. 162 His second role was to assist with a search warrant for the inside of the residence. Det. Mills was responsible for searching the upstairs of the residence. The search commenced at 1:05 am on February 8, 2013. He seized inter alia, 28. 5 grams of cocaine and documents from a shelf in the master bedroom. 163 After Det. Mills entered all the exhibits at the Calgary Police Property Unit, he testified that he completed a 5.2 Report to Justice. He explained that there is form on the CPS computer network that he would have printed off and signed, asking to retain the exhibits for court. He testified that he would have left it at CPS to be sent to the Court. 164 Det. Mills explained that the exhibits are put in a locker so that there is continuity and security. He explained that under the older system which is referred to as LFMS, he would have created the form on the computer and filled in the blanks. He recalled putting in a copy of the 5.2 Form in the locker. He was later unable to locate the document. The computer shows that he created the document on February 8, 2013. How- ever, the document was incomplete. During cross-examination, Det. Mills testified as follows: Q So it’s obviously not the complete one — A No. Q — because it’s not signed. 400 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

A No. Q Is it incomplete in another way? A Yes, sir, it is. It also, when I noted it, was incomplete in two manners, in that it does not have a list of item numbers or their description. And then with the “Disposition,” it does not have the item number. So “A person has been charged, retain as an exhibit for Court purposes,” for example, and Items DM-1 to DM-14, it does not have that in this. So this is not a completed form. 165 Det. Mills had no explanation as to why it was a partial record. 166 Counsel for the defence argued that the failure to file a Report to Jus- tice, Form 5.2 is the responsibility of the seizing officer. In this case, Det. Mills failed to properly file the form. As there was no Report to Justice filed, there is no detention order in relation to the exhibits seized by him. It is submitted that this renders the manner of the search and seizure by Det. Mills unreasonable in the circumstances and in breach of Mr. Rich- ards’ section 8 Charter right to be free of unreasonable search and seizure. 167 Additionally, Det. Mills failed to properly record the seizure in his notes. He was unable to recall whether the cocaine came from the Master Bathroom or the Master Bedroom closet. 168 The Crown conceded that if there were no other evidence, Mr. Rich- ards may have met his burden in establishing that Det. Mills failed to file a Report to Justice. However, in this case there is other evidence. The evidence includes Det. Mills’ notes he made about the filing of a 5.2 Report to Justice within the requisite time frame. Det. Mills also presen- ted the Court with a business record of the property unit: a card that has ticked off that he submitted the Report to Justice with the items when they went into property. He also provided the Court with at least a partial record of the computer record that shows a partial Report to Justice. Det. Mills testified that if the Report to Justice is incomplete he will receive a rejection notice. He never received such a notice. 169 The list of items were disclosed in a list in Det. Mills notes, but they were not disclosed in the Report to Justice form. 170 Even if the Court finds that no 5.2 was filed, the Crown urges me that it would be an unfair assessment to find Det. Mills negligent. Police of- ficers should not be required to follow up with the courts to ensure that a report is actually on the court file. R. v. Richards S.L. Hunt McDonald J. 401

The Law 171 Counsel for the defence relied on R. v. Guiller, [1985] O.J. No. 2442 (Ont. Dist. Ct.). In this case, Borins DCJ reviewed five search warrants executed during investigations into an alleged conspiracy to traffic in heroin. Borins DCJ determined that all of the warrants were facially in- valid for failing to particularize the subject matter of the search and the offence. He also found numerous other breaches of the defendants’ sec- tion 8 Charter rights in the manner in which the various warrants were executed. Among those breaches was the failure of the police to file a return pursuant to then s. 443(1)(e) of the Criminal Code. Borins DCJ also specifically addressed the failure to make a return and stated at para 42: I have no doubt that the necessity of making a return is an integral and essential aspect of the legal execution of a search warrant. As I will explain, the failure to act in compliance with s. 443(1) removes an essential safeguard to the invasion of privacy rights permitted by that section. It is the courts and not the police who determine whether adequate grounds exist for retaining seized materials. When the pro- visions of s. 443(1) have not been met the search is rendered unlaw- ful: see Bergeron v Deschamps (1977), 33 C.C.C. (2d) 461 at 462- 63, [1978] 1 S.C.R. 243, 73 D.L.R. (3d) 765, per Laskin C.J.C.; Re Chapman and R. (1983), 6 C.C.C. (3d) 296; affirmed (1984), 11 C.R.R. 311, 12 C.C.C. (3d) 1, 46 O.R. (2d) 65. 172 In considering s. 24(2) of the Charter as it relates to the failure to make a return, Borins DCJ said at para 77: I have already spoken of the importance of the return before a justice of materials seized and the fact it forms a vital element of the entire process of search and seizure. I have already underscored the purpose of a return and the necessity of particularizing the subject of the search and the offence under investigation in ensuring that the inva- sion of privacy sanctioned by the issuance of a search warrant has not been exceeded. It may be said that in this case no prejudice resulted to any of the parties by the failure of the justice to make a return. Nobody requested and was denied access to materials seized. How- ever, to give too much weight to the absence of prejudice would be to divorce the safeguard of a return, in particular, from the other safe- guards in ss. 443 and 446. To countenance a flouting of the law is to create the impression in the minds of the police, and others, that the law is unimportant. After all, the sworn duty of the police officers is to uphold the law. I am satisfied that to admit evidence obtained as a 402 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

result of breaking the law would bring the administration of justice into disrepute. 173 Counsel for the defence also relied on R. v. Brown, [2003] O.J. No. 5089 (Ont. S.C.J.), where the failure to file the report was not solely the fault of the responsible officer. The officer attempted to file the Report but the clerk refused to accept it as the original file warrant had not yet being filed. As soon as the officer became aware that he could file the report, he did so. The Court followed Guiller and quashed the warrant. The court then found that the unlawful search was unreasonable. As a result of the seriousness, number and variety of breaches in the matter, the evidence was excluded. 174 In the recent decision of R. v. Garcia-Machado, 2015 ONCA 569 (Ont. C.A.), the police officer obtained a search warrant authorizing him to seize a vial of blood and hospital records after the respondent crashed his vehicle. Section 489(1) of the Criminal Code required the constable to report to a justice “as soon as is practicable” that he had seized and was detaining the vial of blood and the hospital records. The constable testified that he misinterpreted the term “as soon as practicable” and thought it meant he was required to report to a justice once charges were laid. 175 The trial judge noted that the vast majority of Ontario cases that he reviewed suggested that a failure to comply with the return and report provisions is a breach of section 8 of the Charter. The Court of Appeal agreed and stated as follows at para 45: I conclude that the answer to that question is “yes”. As I have ex- plained, it is clear that an individual retains a residual, post-taking reasonable expectation of privacy in items lawfully seized and that Charter protection continues while the state detains items it has taken. Sections 489.1 (1) and 490 govern the continued detention by the state of the items seized and, I conclude, the requirement in s. 489.1 (1) to report to a justice as soon as practicable plays a role in protecting privacy interests. 176 The Court concluded that the constable’s clear failure to comply with that obligation breached section 8. 177 However, the court found that the trial judge erred in the section 24(2) analysis by failing to consider a number of relevant factors. First, the trial judge failed to consider that the search was authorized by a war- rant. Second, in assessing the impact of a breach, a trial judge should consider the nature of the respondent’s reasonable expectation of privacy R. v. Richards S.L. Hunt McDonald J. 403

at the time of the breach. The respondent had a minimal residual privacy interest in the blood sample. Third the trial judge did not consider that the property seized was that specifically authorized by the warrant. Fourth, even if the constable made the requisite report as soon as practi- cable the justice of the peace would have ordered detention of the evi- dence. This was a case of delayed compliance not non-compliance and finally, in the case of the hospital records the impact of the breach on the respondent’s residual privacy interest was even less than in the case of the blood sample. 178 In my view, Garcia-Machado is distinguishable from the present case. In the present case, the court file does not show that a Report to Justice has been filed. However, there was other evidence before me that supports Det. Mills version of event. I am not prepared to draw the con- clusion that Det. Mills was negligent with respect to filing the Report, albeit his practices are not as thorough as Det. Lindemann. First, Det. Mills did make notes about filling in a 5.2 Report to Justice within the requisite time frame. Second, Detective Mills provided the Court with a business record that was a card ticked off that he submitted the Report to Justice. This court was also shown a partial record of a computer record that shows a Partial Report to Justice. Finally, Det. Mills testified that if there is a failure to file a Report to Justice, police officers receive a no- tice. He did not receive a notice. 179 However, even with this evidence, I do find that a Report to Justice was not filed. I do accept that Det. Mills did attempt to file a Report to Justice but for some reason it did not get properly filed. Therefore, I find that there was a technical breach of section 8. 180 However, in balancing the section 24(2) factors in assessing exclu- sion, I would not exclude this evidence. As in Garcia-Machado, this search was authorized by a warrant. The accused was not deprived of the use or enjoyment of the items. This was not a cell phone or a laptop. This also was not a case of complete non-compliance. I found that Det. Mills was not negligent and he genuinely believed that he had filed a Report to Justice. There was no dishonesty or bad faith on the part of Det. Mills.

Conclusion 181 I am satisfied that the police had reasonable and probable grounds to arrest Mr. Richards. Further, I find that the search warrant issued to search Mr. Richard’s home was valid. Although Mr. Richard’s right to counsel was violated by the delay in giving him the right to contact coun- 404 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

sel, I find that the evidence found at his home was not in any way linked or connected to the section 10(b) breach. 182 Accordingly, the evidence adduced in the voir dire will form part of the trial proper. Evidence admissible. Caine v. Burris 405

[Indexed as: Caine v. Burris] Margaret Demetra Caine, Applicant and Mark Lincoln Gerome Burris, Respondent Alberta Court of Queen’s Bench Docket: Ft. McMurray 4813-004784 2016 ABQB 126 W.N. Renke J. Heard: February 23, 2016 Judgment: February 24, 2016 Written reasons: March 2, 2016 Family law –––– Custody and access — Terms of custody order — Removal of child from jurisdiction –––– Interim and without prejudice order — Parties married in 2008, had two children, and divorced in 2013 — Children resided primarily with mother and spent approximately 30 per cent of time with fa- ther — In February 2016, mother lost job in Alberta — She obtained new em- ployment in Quebec beginning March 2016 — Mother applied for permission to relocate children — Application granted in part, on interim basis — Court found order that could be varied only on proof of material change in circumstances should not be made in chambers on basis of untested affidavit evidence and in- complete record — Court could grant interim without prejudice mobility order after considering protection of father’s due process interests, strength of mother’s case, and whether and to what degree relationship of access parent could be preserved — Father’s due process interests could be protected by al- lowing him to file new affidavit, cross-examine mother on her affidavit and ap- ply to call viva voce evidence, if necessary — While moving children away from school and community would constitute significant disruption, it would al- low children to develop relationship with extended family — Placing children in primary care of father, whose work schedule required him to be away from home for extended periods, would also constitute significant disruption — In- terim order was in children’s best interests — Father was to have reasonable and generous access on two weeks’ notice and with travel expenses defrayed by $1,000 decrease in child support in month following any access visit. Cases considered by W.N. Renke J.: Botticelli v. Botticelli (2009), 2009 ABQB 556, 2009 CarswellAlta 1545, 74 R.F.L. (6th) 367 (Alta. Q.B.) — followed 406 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Cavanaugh v. Balkaron (2008), 2008 ABCA 423, 2008 CarswellAlta 1963, 60 R.F.L. (6th) 64, (sub nom. E.A.C. v. R.B.) 446 A.R. 302, (sub nom. E.A.C. v. R.B.) 442 W.A.C. 302, [2008] A.J. No. 1393 (Alta. C.A.) — referred to F. (R.J.) v. F. (C.M.) (2014), 2014 ABCA 165, 2014 CarswellAlta 775, [2014] 9 W.W.R. 569, 47 R.F.L. (7th) 1, 100 Alta. L.R. (5th) 219, 575 A.R. 125, 612 W.A.C. 125 (Alta. C.A.) — referred to Gordon v. Goertz (1996), [1996] 5 W.W.R. 457, 19 R.F.L. (4th) 177, 196 N.R. 321, 134 D.L.R. (4th) 321, 141 Sask. R. 241, 114 W.A.C. 241, [1996] 2 S.C.R. 27, (sub nom. Goertz c. Gordon) [1996] R.D.F. 209, 1996 Carswell- Sask 199, [1996] S.C.J. No. 52, 1996 CarswellSask 199F (S.C.C.) — followed Grunow v. Grunow (2014), 2014 ABQB 527, 2014 CarswellAlta 1997 (Alta. Q.B.) — referred to Heikel v. Heikel (2007), 2007 ABQB 378, 2007 CarswellAlta 1472, 44 R.F.L. (6th) 102 (Alta. Q.B.) — referred to Hryniak v. Mauldin (2014), 2014 CarswellOnt 640, 2014 CarswellOnt 641, 37 R.P.R. (5th) 1, [2014] S.C.J. No. 7, 46 C.P.C. (7th) 217, 27 C.L.R. (4th) 1, (sub nom. Hryniak v. Mauldin) 366 D.L.R. (4th) 641, 2014 CSC 7, 453 N.R. 51, 12 C.C.E.L. (4th) 1, 314 O.A.C. 1, 95 E.T.R. (3d) 1, 21 B.L.R. (5th) 248, [2014] 1 S.C.R. 87, [2014] A.C.S. No. 7, 2014 SCC 7 (S.C.C.) — followed MacPhail v. Karasek (2006), 2006 ABCA 238, 2006 CarswellAlta 1035, 30 R.F.L. (6th) 324, 65 Alta. L.R. (4th) 205, 273 D.L.R. (4th) 151, [2006] A.J. No. 982, 409 A.R. 170, 402 W.A.C. 170 (Alta. C.A.) — considered Milton v. Letch (2013), 2013 ABCA 248, 2013 CarswellAlta 1154, 32 R.F.L. (7th) 57 (Alta. C.A.) — considered Sangha v. Sandhar (2013), 2013 ABCA 259, 2013 CarswellAlta 1195, [2013] A.J. No. 745 (Alta. C.A.) — referred to Thie v. Thie (2014), 2014 ABQB 286, 2014 CarswellAlta 773, 47 R.F.L. (7th) 299, 589 A.R. 203 (Alta. Q.B.) — considered Thie v. Thie (2014), 2014 ABCA 249, 2014 CarswellAlta 1257, 47 R.F.L. (7th) 311, 577 A.R. 239, 613 W.A.C. 239 (Alta. C.A.) — referred to W. (D.L.) v. D. (H.A.) (2015), 2015 ABCA 203, 2015 CarswellAlta 1079 (Alta. C.A.) — considered Statutes considered: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) s. 16(8) — considered s. 16(10) — considered Caine v. Burris W.N. Renke J. 407

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

APPLICATION by mother for order permitting her to relocate with children.

Mark R. Baril, for Applicant Terrence A. Cooper, Q.C., for Respondent

W.N. Renke J. (orally):

1 Margaret Demetra Caine and Mark Lincoln Gerome Burris were mar- ried in Montreal in 2008 and divorced in 2013. While the evidence was somewhat unclear on this point, they had moved to Fort McMurray in or about 2010. There are two children of the relationship, [A-M], who’s 7, and [M-M], who’s 5. Mark has court-ordered access to the children. 2 Margaret lost her job in Fort McMurray in early February 2016 but she has obtained a position with the Fraser Williams Mental Health Resi- dence in Montreal starting March 8, 2016. She has secured accommoda- tions in Montreal that she can afford. She will have sufficient income to support herself and her children. Margaret’s parents live in Montreal and are available to provide support. 3 Margaret brought a mobility application in Family Chambers. Her ap- plication was primarily for an order permitting her to relocate with the children from Fort McMurray to Montreal. 4 Mark opposed the application but more specifically argued that the application must be adjourned. In para 3 of his affidavit, he stated that “I swear this affidavit on an emergency basis due to the fact that I was served with minimal notice and when I was working. I am reserving the right to swear a fuller and more complete affidavit when I am afforded more time.” Mark’s position was that a decision respecting the mobility application could not fairly be made in Chambers based on the record. He wishes to question Margaret on her affidavit. Whether or not viva voce evidence is required, the matter should be put over to at least a Spe- cial Chambers application. 5 Two issues arise: First, may the mobility application be decided in Chambers on the basis of the affidavits filed? 408 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Second, may an interim without prejudice mobility order be granted in Chambers, pending proceedings to follow and a further court order?

1. May the mobility application be decided in Chambers on the basis of the affidavits filed? 6 Mobility applications have been decided following trial or with at least the benefit of viva voce evidence: e.g., MacPhail v. Karasek, 2006 ABCA 238 (Alta. C.A.); Milton v. Letch, 2013 ABCA 248 (Alta. C.A.); Grunow v. Grunow, 2014 ABQB 527 (Alta. Q.B.); Thie v. Thie, 2014 ABQB 286 (Alta. Q.B.), affd 2014 ABCA 249 (Alta. Q.B.). 7 Nevertheless, mobility applications do not always require viva voce evidence. Mobility applications have been decided in Special Chambers Applications on the basis of affidavit evidence: Heikel v. Heikel, 2007 ABQB 378 (Alta. Q.B.), Rawlins J at paras 27 and 28; W. (D.L.) v. D. (H.A.), 2015 ABCA 203 (Alta. C.A.). 8 The question is whether a mobility application may be decided yet farther from the procedural rigours of trial at the stage of a Chambers application, without the benefit of questioning, when — as in this case — the respondent’s evidence is that he has not had sufficient time to prepare a proper response. In this instance the parties were accorded ample time for argument and had the time for argument that they would have had in a Special Chambers Application, but that does not address the problem of the underlying weaknesses of the record, of the evidential foundation for the application. 9 A decision in Chambers, no less than a Special Chambers decision or a trial decision, must be “fair and just.” A Chambers decision can be fair and just only if, as Justice Karakatsanis stated in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C.) at para 49, “the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expe- ditious and less expensive means to achieve a just result.” I note that expeditiousness and inexpensiveness are only factors to be considered and do not define what is “fair and just.” 10 In my opinion, a mobility application should not normally be decided in Family Chambers through granting an order that could only be varied on proof of a material change in circumstances. 11 In this case, given the representations that a proper response was not possible because of the timing of service of the application, the expressed Caine v. Burris W.N. Renke J. 409

need to question Margaret on her affidavit, and — as will be referred to below — the evidential gaps in the record, I will not decide the mobility issue, in the sense of granting an order that could only be varied on proof of a material change in circumstances. I do take into account that this application was not wholly a surprise. Mark’s affidavit refers to a mobil- ity application by Margaret in 2011. There were some submissions about precisely when Mark learned about the substance of this application. That being said, he did have work commitments, he didn’t know exactly what would be alleged until he saw Margaret’s affidavit, and he was forced to respond quickly. I accept that he could not, in the circum- stances, have provided the evidence that he would have had he more time. 12 A Special Chambers Application should be booked, to follow ques- tioning on affidavit. 13 However, this finding does not determine whether I should adjourn Margaret’s application without making any order whatsoever. I must ad- dress the second issue.

2. May an interim without prejudice mobility order be granted in Chambers, pending proceedings to follow and a further court order? 14 Three main reasons were advanced against granting an “interim in- terim” or an “interim without prejudice” mobility order in Chambers. First, if granting a mobility order would not be fair because of the weak- nesses of the record and the inability of the respondent to properly re- spond, granting a without prejudice order would also be unfair. Second, a without prejudice mobility order, as much as an unqualified mobility or- der, has a decisive character. The children are moved. The change is one that the access parent cannot recover from; his or her position and rela- tionship with the children is undermined. One might say that the access parent suffers, from a litigation standpoint, a form of irreparable harm. Third, if the without prejudice mobility order does not stand, it puts the children at risk of being pulled back to the access parent. The children face the prospect of being “yo-yo’d” between the parents, which cannot be consistent with their need for stability and their best interests. 15 In my view, a without prejudice mobility order would be appropriate only if these concerns can be addressed. Three tests should be considered to determine whether a without prejudice mobility order would be appro- priate — (1) whether the due process interests of the respondent will be 410 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

protected; (2) the strength of the applicant’s case; and (3) whether and to what degree the relationship of the access parent to the children may be preserved.

(1) Will Mark’s due process interests be protected? 16 In my view, the due process interests of Mark will be protected. Mark will be able to question Margaret on her affidavit. If need be, he could apply to substitute a new affidavit for his current affidavit. If it is deter- mined that viva voce evidence is necessary to resolve the issues, an appli- cation can be made for the requisite order. Viva voce evidence may be heard at a Special Chambers Application. The Justice presiding at the Special Chambers Application will be able to decide based on the suita- bly amplified record. 17 Moreover, my understanding is that a Special Chambers Application date is available in April. If counsel book this date now and cooperate respecting the steps to follow, the requisite procedural steps could be completed in time for the application. That is to say, a formalized resolu- tion of the mobility issues is available relatively quickly.

(2) What is the strength of Margaret’s case? 18 There are three basic considerations. 19 First, Margaret has a right to move. She is under no obligation to remain in Fort McMurray, and certainly under no obligation to take steps short of hardship to remain in Fort McMurray. According to the Court of Appeal in MacPhail v. Karasek at paras 44 and 45, [44] ..... Canadians are mobile and the courts are not the arbiters of the reasonableness of every decision a custodial parent makes. Custo- dial parents cannot be held hostage to the place the access parent lives. Certainly access parents are not. Moreover, it is not an option to conclude that a child’s best interests are best served by both parties living in the same place any more than it is an option to consider that it is in a child’s best interest that their parents remain together. [45] Canadians have the right to choose to separate and divorce, and they have the right to relocate, and it is not for the courts to deter- mine whether they like or agree with the reason for separating or moving. Custodial parents should not be faced with a potential loss of custody simply because they choose to move. Nor should a deci- sion to move be seen automatically as a negative factor in the ability to parent. Caine v. Burris W.N. Renke J. 411

See also Sangha v. Sandhar, 2013 ABCA 259 (Alta. C.A.) at para 2. 20 Second, and this is an important qualification of the first considera- tion, Margaret’s right to move does not entail that — without more — she has the right to take the children with her. The mobility question is not a question about the parent’s right to move. The parent is entitled to move. The mobility question is about the best interests of the child and whether the disruption of existing access arrangements is in the best in- terests of the child. 21 Subsection 16(8) of the Divorce Act provides that In making an order under this section, the court shall take into con- sideration only the best interests of the child of the marriage as deter- mined by reference to the condition, means, needs and other circum- stances of the child. This principle is echoed by Justice McLachlin, as she then was, in Gordon v. Goertz, [1996] 2 S.C.R. 27 (S.C.C.), the foundational mobility authority, at para 50: “... The ultimate question in every case is this: what is in the best interests of the child in all the circumstances, old as well as new?” See also Cavanaugh v. Balkaron, 2008 ABCA 423 (Alta. C.A.) at para 12. 22 Third, for a without prejudice mobility order to be justified, it must be possible to find, on the record, given the procedural context, and given the measures proposed to mitigate adverse impacts on the respondent as a result of the order (which will be considered in the next part of these reasons), that moving the children would be in their best interests. 23 In Gordon v. Goertz, Justice McLachlin summarized the law gov- erning mobility applications at para 49: 1. The parent applying for a change in the custody or access or- der must meet the threshold requirement of demonstrating a material change in the circumstances affecting the child. 2. If the threshold is met, the judge on the application must em- bark on a fresh inquiry into what is in the best interests of the child, having regard to all the relevant circumstances relating to the child’s needs and the ability of the respective parents to satisfy them. 3. This inquiry is based on the findings of the judge who made the previous order and evidence of the new circumstances. 4. The inquiry does not begin with a legal presumption in favour of the custodial parent, although the custodial parent’s views are entitled to great respect. 412 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

5. Each case turns on its own unique circumstances. The only issue is the best interest of the child in the particular circum- stances of the case. 6. The focus is on the best interests of the child, not the interests and rights of the parents. 7. More particularly the judge should consider, inter alia: (a) the existing custody arrangement and relationship be- tween the child and the custodial parent; (b) the existing access arrangement and the relationship between the child and the access parent; (c) the desirability of maximizing contact between the child and both parents; (d) the views of the child; (e) the custodial parent’s reason for moving, only in the exceptional case where it is relevant to that parent’s ability to meet the needs of the child; (f) disruption to the child of a change in custody; (g) disruption to the child consequent on removal from family, schools, and the community he or she has come to know. 24 In this case, the proposed move would be a material change in cir- cumstances permitting consideration of the variation of the existing or- ders granting Mark access. This point was not contested in argument: see Gordon v. Goertz at paras 12–16. I will consider the application of the factors listed at number 7 in para 49 of Gordon v. Goertz.

re: (d) the views of the children 25 There was no evidence of the views of the children. They are young, ages 5 and 7, and keeping them out of the litigation is in their best interests.

re: (e) the custodial parent’s (Margaret’s) reason for moving 26 There were some submissions about Margaret’s reasons for moving. Concern was expressed that she had the money and had the ties to stay in Fort McMurray, that she had failed to provide any evidence of a job search here, that she had a severance package in hand from her former employer, and that she was taking the opportunity presented by the pack- age and a new job in Montreal to leave and be with her fianc´e. None of that was relevant. There was no evidence that Margaret’s decision to Caine v. Burris W.N. Renke J. 413

leave had anything to do with her parenting, with her ability to meet the needs of the children. As indicated, she is entitled to leave Fort McMur- ray. Justice McLachlin elaborated on this factor in Gordon v. Goertz at para 48: [48] ... The decision of the custodial parent to live and work where he or she chooses is likewise entitled to respect, barring an improper motive reflecting adversely on the custodial parent’s parenting ability. and at para 23: [23] Under the Divorce Act, the custodial parent’s conduct can be considered only if relevant to his or her ability to act as parent of the child. Usually, the reasons or motives for moving will not be relevant to the custodial parent’s parenting ability. Occasionally, however, the motive may reflect adversely on the parent’s perception of the needs of the child or the parent’s judgment about how they may best be fulfilled. For example, the decision of a custodial parent to move solely to thwart salutary contact between the child and access parent might be argued to show a lack of appreciation for the child’s best interests .... However, absent a connection to parenting ability, the custodial parent’s reason for moving should not enter into the inquiry. See also F. (R.J.) v. F. (C.M.), 2014 ABCA 165 (Alta. C.A.) at para 59.

re: (c) the desirability of maximizing contact between the children and both parents 27 Justice McLachlin referred to “the desirability of maximizing contact between the child and both parents” [emphasis added]. This factor re- flects the direction in s. 16(10) of the Divorce Act: In making an order under this section, the court shall give effect to the principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child .... This principle is mandatory, but not absolute. The Act only obliges the judge to respect it to the extent that such contact is consistent with the child’s best interests; if other factors show that it would not be in the child’s best interests, the court can and should restrict contact: Gordon v Goertz at para 24; ADM v SWL, 2015 ABQB 630, Jones J at para 134 - 135. 414 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

re: (b) the existing access arrangement and relationship between the children and the access parent (Mark) 28 On the evidence, Mark does not currently have “shared” custody for the purposes of the Child Support Guidelines. Nonetheless, he has parenting time with the children about 30% of the time. That is signifi- cant time with the children. 29 The affidavits did conflict on the issue of Mark’s exercise of his parenting time. There is no basis for resolving the conflicts given the affidavits alone. I will proceed on the assumption, which is fair to Mark for the purposes of this application, that he is indeed an excellent parent who loves and has a very strong relationship with his children. 30 Were there evidence that Mark did not have a strong and deep rela- tionship with his children, the mobility decision would be easier; but even in the face of strong and deep relationships by an access parent with his children, mobility decisions are made. Two former spouses may be excellent parents and may deeply love their children, but one may move and the children may move too. This is a regrettable but unavoidable consequence of marriage breakdown.

re: (a) the existing custody arrangement and the relationship between the children and the custodial parent (Margaret); and

re: (f) disruption to the children of a change in custody; 31 There is no presumption in favour of the status quo, no presumption in favour of the custodial parent: Gordon v. Goertz at para 48 and Botticelli v. Botticelli, 2009 ABQB 556 (Alta. Q.B.), Veit J at para 17. 32 Nonetheless, in Milton v. Letch at paras 14 and 15, the Court of Ap- peal held that it is an error in principle to fail to address the extent to which a child may have bonded with the parent in whose “primary care” the child has been since birth. In W. (D.L.) v. D. (H.A.), Justice To- polniski’s Special Chambers Application reasons were quoted and her findings were upheld. She is quoted at para 3: A key consideration in these cases is the importance of the child re- maining with a parent to whose custody the child has become accus- tomed and weighing that against continuance of full contact with the child’s effective access parent, its extended family and its community .... Caine v. Burris W.N. Renke J. 415

She added: And do think about the bond between parent and child, and the ef- fects separation might have upon the child if primary care was awarded to the parent who had not previously been the primary caregiver. It is clear from the case authorities that where one parent has as- sumed a greater role in caring for the child, Courts must consider the impact on the child of making any change to the parenting arrangement.... and at para 6: The existing custody and access arrangement, the ability to maximize contact and the status quo, the mother has been the child’s primary caregiver since birth. There is no question of that. She is the constant.... I do not think it is realistic to imagine that Albert could be separated from his mother were she to move to Nova Scotia without some sig- nificant impact emotionally on him and that dovetails onto the next factor. In my view, both of these factors weigh in favour of the mother. Margaret has been the primary caregiver for the children since birth. The children have been primarily resident with her. Mark has been an access parent, not the primary care-giver. This has two implications. First, as the Court of Appeal has directed, this relationship, the degree of bonding between Margaret and the children, must be given significant weight. 33 Second, what must also be considered is the disruption were Margaret to move and leave the children behind. It would be an error in principle not to consider the children’s bond with their mother and the effect that separation might have upon the children if Margaret became simply an access parent: MacPhail v. Karasek at paras 32-33; F. (R.J.) v. F. (C.M.) at para 27; Milton v. Letch at paras 14 and 15. 34 I find, echoing Justice Gill in the Thie case, that “[a]t this stage of their lives it would be a major disruption for the children to stop living with the mother or to be geographically separated from the mother:” Thie v. Thie at para 51; see also para 47 (QB). 35 Moreover, Mark’s proposal for becoming the primary resident parent would not mitigate the disruption. The fact is that he works long hours. Reference was made to his “6 on, 6 off” schedule. On the evidence, he would not be home every night. He would not be able to take the chil- dren to school or pick them up every day. He would not be able to take 416 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

them to dance classes. He would have to hire persons to assist him. There was no evidence that Mark has family in Fort McMurray who could help. 36 I am aware of Justice Veit’s comment in Botticelli v. Botticelli at para 37: His son’s best interests do not require that his father personally cooks his every dinner and gives him his every bath. Just as the mother has hired a nanny, so the father is able to obtain assistance in parenting his son. There is no obligation on Mark to be constantly available for the chil- dren. Margaret plans to go to school herself. She plans to work. She plans to be assisted in Montreal by family. Mark faces a double problem, though. First, his arrangements would not compensate for the disruption caused by the children losing their primary relationship with their mother. Second, his work entails more time away from home than office employment, which is what Margaret has secured.

re: (g) disruption to the children consequent on removal from family, schools, and the community they have come to know 37 Mark is right that the children have lived most of their lives — the youngest all of her life — in Fort McMurray. [A-M] will have friends here. The children will have friends at dance. 38 Furthermore, the move would come about three-quarters through the school year. This would be disruptive to the children’s education. 39 There was very little discussion of the impact of a late switch in schools on the children in Margaret’s affidavit. Fortunately, the children have been in French schools in Fort McMurray. In Margaret’s opinion, “they will be able to adjust to the culture in Montreal.” 40 I do take into account that if a move were to occur soon, if the school year ends at about the end of June, the children would have about four months of school to go. The move would be less disruptive to [M-M’s] kindergarten studies; and the children are young enough that a parent can do significant and useful supplemental work with them at home. 41 This change, though, would not be easy for the children. This factor counts most strongly against an interim move.

re: potential further disruption for the children 42 Another factor counting against an interim mobility order is the pros- pect that the children will be required following the Special Chambers Caine v. Burris W.N. Renke J. 417

Application to return to Fort McMurray. Moving, then moving back, would be disruptive. 43 One factor mitigating this risk is that the Special Chambers Applica- tion will be held in April. If the children were called back to Fort Mc- Murray, this would probably await the end of June when school was done. They would have been away four months. That is not an overly long time; they would likely not have developed significant roots and attachments in that time that would cause them pain to leave. 44 Another factor mitigating the risk is the degree of likelihood of rever- sal of the interim without prejudice mobility decision. The weaker Mar- garet’s case, the stronger the likelihood of later reversal. I would not pre- sume to direct or predict the decision of a Justice on the amplified record at the Special Chambers Application. I can only make an assessment based on the evidence I have before me. I will defer that assessment to my conclusion respecting this test for an interim without prejudice mo- bility order.

re: further benefits for the children 45 There are some additional and potentially offsetting benefits that the move to Montreal could bring. Margaret has a job in hand with the Fraser Williams Mental Health Residence. If she can enhance her economic po- sition, she thereby enhances the family’s economic position. She has ob- tained a 3 bedroom residence in Montreal for herself and the children which she can afford. 46 Importantly, she will be moving back to family. There is no evidence that Margaret’s family currently has relationships with the children, but they could have a relationship. Margaret deposed that My family including my parents, aging grandmother, brother, his wife and 2 children, as well as numerous cousins, uncles, aunts, etc. reside in Montreal and are my support system (affidavit at para 12). Further, her fianc´e and his family are also from Montreal, and his par- ents’ home is a few blocks from her new home (affidavit at para 12). Margaret’s parents “are willing to assist with caring for the children after school when I am at work. The school bus can deliver the children to the curb in front of my parent’s home” (affidavit at para 18). The children will not be required to attend day care. 47 In Montreal, she will be able to promote her children’s religious up- bringing. Margaret deposed that “I have not been able to fully practice my religion or share it with my children in Fort McMurray as there is no 418 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

Greek Orthodox Church here. In Montreal I can more fully practice and better teach that part of my life and the children’s heritage to them” (affi- davit at para 12). 48 The children will also be able to practice Greek, which they speak, with Margaret’s family (affidavit at para 19).

conclusion respecting the children’s best interests 49 In my opinion, on the record as it is, Margaret has a strong case. The record is not perfect. There are areas that could be amplified by further evidence. But there is no indication that there is other evidence not yet filed that would significantly undermine Margaret’s case. In my opinion, on the record as it is, there is a strong inference that the move to Mon- treal with Margaret would be in the children’s best interests, and remain- ing in Fort McMurray, with Margaret as the access parent, would not be in the children’s best interests.

(3) How may Mark’s relationship with the children be preserved? 50 Another way to put this question is, how may the disruption to Mark’s relationship with the children be mitigated? 51 What is contemplated is an interim without prejudice order. The order would only be in effect until replaced by a further court order. The objec- tive would be to promote Mark’s ability to continue to have time with the children given the significant change in the distance between Mark and the children. 52 The following measures would serve until further court order: (a) The parties shall continue to have joint custody of the children. (b) So long as the children reside in Fort McMurray with Mar- garet, Mark shall have access to the children in accordance with the Order granted by Justice Hughes on February 26, 2014. (I assume that the parties will settle the terms of this Order.) (c) Following Margaret’s relocation to Montreal, Mark shall be entitled to reasonable and generous access with the chil- dren. Mark shall provide the Mother with notice of his in- tention to exercise access at least two weeks prior to the date of the intended access at an e-mail address specified by Margaret. Caine v. Burris W.N. Renke J. 419

(Counsel did not address the access days that would make sense in an interim order, but this could be set at a minimum and maxi- mum number, on the expectation that Mark would visit once per month.) (d) Mark shall pay s. 3 child support based on his line 150 in- come, but if Mark exercises physical access to the children in any month by travelling to Montreal, then he may, in the month following the access visit, reduce his child support payment for that month by $1,000. (e) Mark shall pay his proportionate share of s. 7 expenses. (f) Mark shall have reasonable telephone, text, and social me- dia (including Skype, FaceTime or similar communication platform) access to the children, and Margaret shall facili- tate this access. 53 The distance between Mark and the children cannot be reduced. Visit- ing the children will cause expense. What can be done is to reduce that expense, as indicated. 54 The terms I have set out do not have the detail respecting holidays found in Margaret’s proposal attached to her application. That detail, for times falling after the Special Chambers Application, can be dealt with in the Special Chambers Application. 55 I note that the sort of access arrangement contemplated was employed by Justice Gill in Thie, which was upheld by the Court of Appeal. See Thie v. Thie at para 53 (QB). 56 Finally, (g) pending further order of this Court, Margaret shall not com- mence any application or proceeding relating to the children of the marriage in Quebec or any other province or jurisdiction.

Conclusion 57 In my opinion, an interim without prejudice mobility order may be granted in Chambers, pending proceedings to follow and a further court order, and an interim without prejudice mobility order should be granted to Margaret. The due process interests of Mark are protected by the availability of a Special Chambers Application and procedures for fur- ther disclosure of evidence, and by the without prejudice nature of the order. The order would be in the best interests of the children. The dis- ruption to Mark’s relationship with his children can be mitigated, if only 420 ALBERTA LAW REPORTS 35 Alta. L.R. (6th)

in part, through allowing him to set-off an amount for travel costs as against child support. 58 I therefore make an interim without prejudice order granting Margaret permission to move with the children to Montreal on the terms set out in paras 52 and 56 of these reasons. 59 If counsel cannot work out the maximum and minimum number of access days referred to in para 52(c), they may make written submissions to me within 30 days from today. I will resolve the issue in writing. If counsel require further clarification of the terms of the interim without prejudice order (which would contain the usual corollary relief terms re- specting recalculation, MEP, and provision of copies of income tax infor- mation), they may contact me within 30 days so that terms may be settled. 60 The question of costs is deferred to the Special Chambers Application. 61 I am painfully aware that this is not a perfect solution. It is an attempt to put in place a least-imperfect solution for a consequence of the break- down of the marriage. Application granted in part.