Alberta Take Five December 2012

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December 2012

ALBERTA EDITION

Inside this Issue:

Judiciary; Reasons for Decision; Sufficiency of Reasons for Decision

Civil Procedure; Pre-Trial; Summary Applications; Agency; Piercing the Corporate Veil

Police; Disciplinary Proceedings; Standard of Review

Police; Municipal Law; Documentary Disclosure

Workers’ Compensation; Calculation of Earnings; Estoppel; Res Judicata

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The respondent Dr. Chang was

a professor at the appellant University of Alberta. His research resulted in the discovery of certain biotechnology that had commercial potential. Appellant AcuVector Group Inc. was incorporated to exploit the technology. Dr. Chang transferred rights to AcuVector to permit it to raise funds to develop the technology. The University was a

shareholder in AcuVector, and under its patent policies was entitled to one-third of the net profits generated by the patented technology. In 2002, AcuVector commenced an action against Dr. Chang and others over alleged breaches of patent technology agreements. The University action was commenced in 2003. Statements of defence were filed in 2004, and the affidavits of records were filed in January 2005 and

University of Alberta v Chang, 2012 ABCA 324Areas of Law: Judiciary; Reasons for Decision; Sufficiency of Reasons for Decision

Applications to dismiss actions for want of prosecution overturned; chambers judge upbraided for filing reasons for decision composed of excerpts from parties’ legal briefs

BACKGROUND

August 2006. There was no counterclaim, so pleadings closed in 2004. Dr. Chang brought applications in both the AcuVector and University action under R. 4.31 of the Rules of Court for dismissal for delay. The chambers judge granted the application to dismiss for delay in prosecution, and dismissed both actions. The University and AcuVector appealed.

CLICK HERE TO ACCESS THE JUDGEMENT

http://www.canlii.org/en/ab/abca/doc/2012/2012abca324/2012abca324.pdf


December 2012


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APPELLATE DECISION

University of Alberta v Chang, (cont.)

The appeals were allowed and the

applications were remitted back to trial court for a proper adjudication. The chambers judge followed his practice of cutting and pasting paragraphs from the briefs filed by the parties, having those paragraphs retyped, and then signing them as “Reasons for Judgment”. Judges of first instance are not mere scribes, collators of evidence, collage artists, or way stations on the road to justice. Because they are prepared in an adversarial context, the briefs of the parties tend to be “one-sided”. They generally tend to place the position of that litigant in the best possible light, and downplay or ignore the arguments, authorities, and evidence in support of the opposite side. Merely copying

those briefs often results in a failure to select in a judicial way from the evidence and legal authorities, with a resulting failure to assimilate the competing positions in a transparent and defensible manner. There was no analysis of the competing arguments or evidence offered by the University and AcuVector. The compilation of passages from the chambers briefs did not disclose how the chambers judge arrived at his decision. There were at least two important issues of fact (or mixed fact and law) that required findings of fact or inferences from the evidence: whether there was “inordinate delay”, and whether there had been any “prejudice”. There was competing evidence on these points. It was not possible to afford any deference to the findings of the chambers judge in the present case because it was impossible to tell what those findings were.

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The appellant Elbow River

Marketing Limited Partnership (“Elbow River”) entered into written contracts with the respondent CCF International Corp. (“CCF”) for the supply of biodiesel. When the biodiesel was not delivered pursuant to the contracts, Elbow River commenced an action for breach of contract against both

CCF and the respondent Canada Clean Fuels Inc. (“Canada Clean”). Elbow River alleged that there was a relationship between CCF and Canada Clean that must be reviewed and the legal status determined by a trial judge. Canada Clean applied pursuant to the old Rule 159(3) (now Rule 7.3) to be removed from the action on the basis that there was no genuine issue to be tried. The chambers judge allowed the appeal from the decision

BACKGROUND

Elbow River Marketing Limited Partnership v. Canada Clean Fuels Inc., 2012 ABCA 328Areas of Law: Civil Procedure; Pre-Trial; Summary Applications; Agency; Piercing the Corporate Veil

Trial of agency and piercing the corporate veil issues to proceed; plaintiff proffering sufficient evidence on summary hearing to have issues tried

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of a Master, finding that the allegation by Elbow River that Canada Clean and CCF were in a partnership raised an issue to be tried. However, he refused to allow the issues of agency and piercing of the corporate veil to proceed to trial. Elbow River appealed the agency and piercing rulings. Canada Clean cross-appealed the partnership issue.


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December 2012


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Elbow River Marketing Limited Partnership, (cont.)

APPELLATE DECISION

Canada Clean’s cross-appeal on the

partnership issue was dismissed. Elbow River’s appeal regarding the issues of agency and piercing the corporate veil was allowed, and those issues will proceed to trial along with the question of partnership. The chambers judge made no error in applying Rule 7.3(1)(b), which provides that summary judgment may only be granted if there is no merit to a claim or part of it. In applying the test, he found that Elbow River had met its burden of showing that there was an issue to be tried, that the Master had erred in finding otherwise, and that the issue of whether Canada Clean and CCF were partners must proceed to trial. The chambers judge concluded that Elbow River’s claim in agency failed because it had not proven the necessary elements of control or estoppel. The chambers judge identified the correct test for summary judgment. However,

he erred by misapplying that test with respect to agency and evaluating the evidence on an incorrect standard for a summary judgment application. The test is not whether Elbow River has proven all of the requirements for a finding of agency, but whether it has raised enough evidence to warrant the issue of agency going forward to trial. The chambers judge was aware of the difference, and correctly applied the test in dealing with the issue of partnership. However, he erred in his conclusion with respect to the issue of agency. Canadian courts will pierce the corporate veil only when a corporation has been completely dominated and controlled and used as a shield for fraudulent or improper conduct. The test is not whether Elbow River could prove corporate domination for fraudulent purposes, but whether it was plain and obvious that such an action could not succeed because there was no issue to be tried. At the present stage, it was not possible to say that it was plain and obvious that the corporate veil issue would not succeed, and it was therefore inappropriate to summarily dismiss this part of the action before trial.



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Edmonton (Police Service) v. Alberta (Law Enforcement Review Board), 2012 ABCA 357Areas of Law: Police; Disciplinary Proceedings; Standard of Review

Law Enforcement Review Board not erring in calling for hearings in police misconduct complaint

BACKGROUND

Complainant/respondent

James Korchinski (“Korchinski”) brought complaints of excessive force and other misconduct against police officers/respondents Cst. Sam Najmeddine and S/Sgt. Rein Tonowski. In a disposition letter written by the applicant Chief of the Edmonton Police Service (“Chief”) dated February 23, 2010, Korchinski’s complaints were dismissed on the ground that there was no reasonable prospect of establishing the facts necessary to obtain a conviction at a disciplinary hearing for any Police Service Regulation issues. Korchinski appealed to the Law Enforcement Review Board (“Board”). The Board’s decision dated June 19, 2012 addressed seven allegations

Korchinski made against Cst. Najmeddine and two he made against S/Sgt. Tonowski. Allegation #5 concerned the propriety of Cst. Najmeddine’s failure to conduct a Canadian Police Information Centre (“CPIC”) search before arresting Korchinski on December 5, 2007. Without checking CIPC, Cst. Najmeddine arrested Korchinski on December 5, 2007 for breach of the undertaking condition. Unbeknownst to Cst. Najmeddine, a Justice of the Peace had removed the undertaking condition on November 21, 2007. The Board concluded that “the Chief ought to have considered whether it is acceptable police conduct to make an arrest in circumstances such as these, without first carrying out a CPIC check”. Being of the view that the Chief ’s decision did not properly address the limits of police authority under the circumstances

as a matter of standard of conduct, the Board directed the matter back to the Chief for a hearing pursuant to s. 45(3) of the Police Act, RSA 2000, c P-17 (“Act”). Allegation #6 against Cst. Najmeddine addressed the degree of force he used when arresting Korchinski on December 5, 2007. The Board opined that the Chief ’s decision letter failed to come to grips with the essential factual questions and, consequently, failed to apply any version of the standard of conduct of a peace officer to those facts. The Board chose not to refer the matter back to the Chief for a further investigation. Rather, it directed that a hearing be held under s. 45(3) of the Act in order to appropriately address allegation #6. The Chief applied for leave to appeal the Board’s decisions.




December 2012


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Edmonton (Police Service) v. Alberta, (cont.)

APPELLATE DECISION

The application for leave to appeal was

dismissed. The Chief ’s main contention was that the Board imposed and applied a standard of review of correctness in looking at the Chief ’s decision regarding allegation #5. The applicant contended that, by repeatedly using the words “more robust” in its reasons, the Board was modifying the reasonableness standard of review. There would be more force to the Chief ’s argument on this point were this a situation of a judicial review court purporting to apply a variable standard of reasonableness in its approach to a tribunal’s decision. This was an appropriate case to engage the “sage common law adage” of looking at what the Board did as

distinguished from what the Board said. The real effect of what the Board did in relation to allegation #5 was to find that the Chief ’s approach was unreasonable. The Chief has not shown that the Board’s decision was vulnerable to reversal on the grounds it misapprehended the standard of review to be applied in connection with allegation #5. Leave to appeal on that ground was not warranted. As to allegation #6, the Chief impugned the Board’s reasoning for ordering a hearing after concluding that it could not “readily make any determination” about the portion of the Chief ’s decision relating to the level of force used by Cst. Najmeddine. The Chief submitted that, since the Board did not itself make a finding as to whether or not there was a reasonable prospect of conviction, it could not find the Chief ’s decision unreasonable. However, the Board found there was a triable question as to whether Cst. Najmeddine used inappropriate force in the arrest of Korchinski on December 5, 2007. In light of the record before the Board, there was insufficient evidence that the Board’s decision was patently incorrect so as to justify judicial intervention. Accordingly, leave to appeal on the grounds proposed regarding the Board’s decision on allegation #6 was not warranted.



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McAllister v Calgary (City), 2012 ABCA 346Areas of Law: Police; Municipal Law; Documentary Disclosure

City of Calgary not having control over documents in possession of Calgary Police Service; judicial precedent Hunter v. Eck overturned

On January 1, 2007, the

respondent Kyle Lyndon McAllister (“McAllister”) was assaulted and injured at a C-Train station in the appellant City of Calgary. Members of the Calgary Police Service attended the scene and investigated the incident. McAllister sued the city for breach of statutory duty, negligence and bad faith for damages arising from his injuries, which, he alleged, resulted from a failure by the city to implement adequate security measures at C-Train stations. Neither the police nor the assailant(s) were parties to the

lawsuit. McAllister sought disclosure from the city of records that were in the possession of the police, including investigation reports from the night of the assault. The city refused disclosure on the basis that they were not the city’s records. The Master considered himself bound by Hunter v Eck (1977), 8 AR 508 (CA), affirming (1976), 75 DLR (3d) 101 (Alta QB)

BACKGROUND

(“Hunter”) and ordered the city to request the records from the police and, failing receipt, to bring an application pursuant to rule 209 (now r. 5.13) to obtain the records. The city appealed the Master’s order to a Justice of the Court of Queen’s Bench. Justice Kent expressed some concern with the decision in Hunter, but, like the Master, considered herself bound by it and dismissed the city’s appeal. The city appealed to the Court of Appeal and was granted leave to have the decision in Hunter reconsidered.





December 2012


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The appeal was allowed and the order directing the

city to request the records of the police and, failing receipt, to make a court application to obtain those records, was set aside. Either party was at liberty to make an application pursuant to r 5.13 to obtain relevant and material records from the police. At issue was whether police records were under the “control” of the city such that they must be disclosed pursuant to r 5.6 (formerly r 187.1) of the Alberta Rules of Court. Although the basic structure of the legislation has not greatly altered, some

changes to the Police Act, 1973 (Alta.), c. 44 (now R.S.A 2000, c. P-17), since Hunter was decided indicate a legislative intent to further distance municipal councils from the operation of their police forces. The new Police Act draws a very clear separation between a municipal council and its police service, with the police commission acting as a mandatory (not a discretionary, as in the 1973 Police Act) buffer between the two bodies. If the decision in Hunter were permitted to stand, the city would have greater access to police investigative files than the police commission, the body taxed with general oversight of the police service. This cannot have been the legislature’s intent. As a result, the broad principle set out in Hunter is no longer good law, if it ever was. It is inconsistent with the intention of the legislature in creating distance between municipal councils and the police services they are required to establish.

APPELLATE DECISION

McAllister v Calgary (City), (cont.)

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St. Cyr v Alberta (Workers’ Compensation Board), 2012 ABCA 358Areas of Law: Workers’ Compensation; Calculation of Earnings; Estoppel; Res Judicata

Decision of Workers’ Compensation Appeals Commission on calculation of earnings and evidence affirmed; issue estoppel not applicable

BACKGROUND

The appellant Andre St. Cyr

(“St. Cyr”) fell while cleaning heavy equipment at his workplace in Fort McMurray on March 2, 2002. He sustained bruises and abrasions to the left side of his face and a contusion to his left hip. The respondent Workers’ Compensation Board (“WCB”) immediately accepted his claim for a back injury and contusion to the head. St. Cyr’s employer placed him on modified duty and as a result temporary total disability (“TTD”) benefits were not available to him. The WCB paid for St. Cyr’s physical therapy which ended after only two treatments. St. Cyr was laid off on March 22, 2002 and returned to his

home province of Quebec. St. Cyr attempted to return to work as a heavy equipment operator for a brief period in August 2002 in Quebec. He unsuccessfully sought compensation from the Quebec workers’ compensation body for a neck sprain. The WCB next received information that St. Cyr was being treated by a doctor in Quebec in November 2002. The WCB reopened its file and sought further information to assess St. Cyr’s eligibility for ongoing benefits or services. Medical reporting from Quebec indicated St. Cyr first complained of intermittent pain in his neck, and numbness and burning pain in his arms in August 2001, approximately seven months prior to his work-related accident. A January 2003 MRI indicated St. Cyr had

spondylodiscarthrosis (multi-level degenerative disc disease) in his neck. In a 2010 decision, the respondent Appeals Commission for Alberta Workers’ Compensation (“AC”) concluded that the medical evidence confirmed St. Cyr was capable of suitable modified employment between March 2002 and April 2006, so he was not entitled to TTD benefits for that period. Neither was he entitled to full wage replacement benefits after March 2007. The position of a front desk clerk earning a salary based on the municipality where St. Cyr was employed at the time of his accident was suitable for the purpose of estimating his post-accident earning capacity and calculating his wage loss benefit after March 2007. St. Cyr applied for judicial review, but the reviewing justice affirmed the AC’s decision. St. Cyr appealed.




December 2012


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The appeal was dismissed. In calculating St. Cyr’s

wage loss benefit for the period subsequent to March 18, 2007, the AC determined that the position of a front desk clerk paying $14.50 per hour in the municipality where he had been employed at the time of the accident was appropriate for the purpose of estimating his post-secondary accident capacity. The work was not made available to St. Cyr. He never had the opportunity to accept or refuse a hotel desk clerk position in Fort McMurray. As a result, St. Cyr argued that the WCB could not consider those earnings in calculating his compensation. However, the AC’s interpretation of the applicable legislative and policy provisions was reasonable - the AC explained and interpreted the WCB policies with reasons that were justified, transparent and intelligible, and within the range of acceptable outcomes. The AC pointed out that suitable employment was selected for the purpose of calculating earnings loss. The selection was not a direction to the worker to seek that position and the worker’s inability to find such employment or desire not to perform such work did not in itself defeat the suitability of

the employment selected. The calculation of earnings loss was a comparative process. The reviewing judge did not err in concluding the 2010 AC decision reasonably interpreted the Workers’ Compensation Act, RSA 2000, c W-15, and the WCB policies in question. The AC carefully reviewed and weighed the medical information in coming to its conclusion that St. Cyr was not entitled to full wage loss benefits for the period from March 22, 2002, to April 6, 2006. St. Cyr further contended that the 2010 AC decision appeared to ignore or disregard the previous findings of the AC in April 2006. St. Cyr acknowledged that, while the actual issues involved in the 2006 AC decision and the 2010 AC decision were different, the underlying facts of the former meant that the issue dealt with in the 2010 AC decision was effectively addressed in the 2006 AC decision. Specifically, St. Cyr argued that it was a necessary finding in the 2006 AC decision that he could not work. The Court of Appeal determined that the 2006 AC decision was concerned only with whether or not the March 2, 2002 work-related accident caused or contributed to St. Cyr’s ongoing symptoms in the neck and arm on either a full or aggravated basis. The AC ruled on that issue in favour of St. Cyr and then returned the matter to the WCB to determine his entitlement to benefits. The 2010 AC decision did not address causation, which was the only issue decided in the 2006 AC decision; the 2010 decision dealt with St. Cyr’s entitlement to benefits, which was the very matter that had been returned to the WCB for adjudication by the AC in its 2006 decision. As the issues in the 2006 AC and 2010 AC decisions differed, there was no res judicata or issue estoppel.

APPELLATE DECISION

St. Cyr v Alberta (Workers’ Compensation Board), (cont.)


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Alberta Take Five December 2012