Thomson v University of Alberta, 2013 ABQB 410

Court of Queen ’ s Bench of Alberta Citation: Thomson v University of Alberta, 2013 ABQB 410 Date: 20130723 Docket: 1203 01790 Registry: Edmonton Between: Alan Thomson Plaintiff - and - The Governors of the University of Alberta Defendant _ ________________________________________ ______________ Judgment of the Honourable Madam Justice K. M.

Eidsvik _________________________________________ ______________ [ 1 ] The Plaintiff appeals the decision of the Master that found that a letter written by the Chair of the Department of Medicine in the grievance process initiated by the Association of Academic Staff University of Alberta (AASUA), on behalf of the Plaintiff, was privileged and not produceable in this action. Master’s Decision [ 2 ] The reasons for the Master’s decision are well laid out at 2013 ABQB 128 .

He properly set out the salient facts in this case and the law with respect to settlement privilege so I will not repeat his excellent review in that regard except as necessary. The debate here was aptly noted by him at para 20: “As is often the case, the parties do not disagree on the law, they disagree on the application of the facts of this case to the law.”

[3] In the end the Master agreed with the position proposed by the University that the process in question here, in the grievanceprocedure set out in the collective agreement, is one of possible accommodation and an attempt to resolve a dispute so that the decisionletter was therefore part of a settlement negotiation and protected from production. Further, after reviewing the law and the letter theMaster did not accept that there had been waiver of the privilege because of an answer to an undertaking that discussed the result of thedecision contained in the letter.

Finally, he did not find that any exceptional reasons applied to lift the privilege afforded. Standard of Appeal [4] It was agreed that the standard of appeal of the Master’s decision is one of correctness. Analysis [5] In my view, the Master applied the rule of settlement privilege too widely in this case. He said at para 26: “If these meetings (referring actually to one meeting under

Article 27.04.1 of the collective agreement) are to be open in an attempt toresolve the grievance it seems clear that the discussions and documents flowing therefrom should remain confidential.” [6] Indeed he referenced earlier in this regard that “there is an understanding in labour matters that communications duringgrievance procedure are privileged.” (At para 24). [7] Having reviewed the various arbitration cases provided to me, and one superior court case from Nova Scotia (Department ofJustice v Nova Scotia Govt Employees Union and Kydd 2004 NSSC 204) it appears that in the arbitration setting, where rules of evidenceare not bound by precedent, arbitrators give a wide cloak to keep the grievance process confidential.

However, in my view, the rule oversettlement privilege is not that wide in our courts. [8] Mr. Justice Slatter, as he then was, discussed the test in Hansraj v. Ao 2002 ABQB 385. He referred to the type of privilegethat attaches to communications in furtherance of settlement. After referring to Costello v City of Calgary (1997) 1997 ABCA 281, 53 Alta. L.R. (3d) 15, 2009 A.R. 1 (C.A.), which both parties here agree sets out the correct test, three conditions must becomplied with for the privilege to attach to any form of communication.

The first two are not in dispute - that there is a litigious disputeand the communication was made with the intention that it would not be disclosed to the Court. It is the

interpretation of the third testwhich is at issue - whether the purpose of the communication is to attempt a settlement. [9] The facts in Hansraj are instructive. In that case an application was being made to lift the claimed privilege over certaindocuments and correspondence found in the adjuster’s file prepared for an insurer who was investigating a car accident. Justice Slattersaid the following at para 17: “The third branch of the test in Costello is that the communication must be in “an attempt to effect settlement”.

The question is howclosely the correspondence has to be to the settlement efforts to attract the privilege. Counsel for the Defendant Ao argued that the onlyreason that adjusters become involved in files is to achieve a settlement, so that everything they do is done in an effort to achievesettlement. She argued in effect, that every piece of correspondence between the parties was therefore protected by the privilege.

In myview, the rule is not that wide.” [10] Justice Slatter acknowledged that adjusters are interested in settlement but he also noted that the work of the adjuster will alsobe directed to the eventual trial in the event that the negotiations fail. He held that it went “too far” to say that every piece ofcorrespondence that left an adjuster’s office is privileged. He said “The appropriate approach is to examine the correspondence as awhole, and in context, and to see whether the rationale for the privilege applies to it.” (at para 20).

The Court of Appeal agreed with thisanalysis of the law - at 2004 ABCA 223 para 8. [11] The similarity with the argument in this case is striking. Here too the Defendant is saying that basically the whole of thegrievance procedure should be cloaked with privilege - in the way that arbitrators deal with this issue. But our Court of Appeal disagrees- it states that we must review the correspondence and determine whether it invites compromise, outlines approaches towards settlement,recognizes weaknesses, or makes admissions for instance.

Or, as more recently discussed by our Court of Appeal in BellatrixExploration Ltd. v. Penn West Petroleum Ltd 2013 ABCA 10 at para 2, we must look at whether there is “at least a hint of potentialcompromise or negotiation” in the correspondence.

The Court repeated that an “unconditional assertion of rights without any connectionto the possibility of settlement” or correspondence that does “not offer any potential for compromise” do not fall within the scope of therule. [12] I would be remiss at this stage to not mention the Supreme Court of Canada’s latest word on this issue in the Sable OffshoreEnergy Inc. v Ameron International Corp case, 2013 SCC 37. The Court had to decide whether the negotiated amount itself would becovered by settlement privilege.

The Court found that it was - it said at para 18 “Since the negotiated amount is a key component of the“content of successful negotiations”, reflecting the admissions, offer, and compromises made in the course of negotiations, it too isprotected by the privilege.” Review of the correspondence [13] This then leads me to a review of the correspondence in question - the letter of April 30, 2012. This letter was prepared tofulfill the requirements of the grievance process generally found in

article 27 of the collective agreement. It reads as an outline of theUniversity’s position on the facts in the case that support its position and frankly differs only slightly, despite its 5 page single spacelength, to the affidavit filed by Dr Ballerman on June 29, 2012 or the University’s Statement of Defence.

[ 14 ] The Defendant argued that the letter was delivered for the purpose of convincing the AASUA that it should compromise its position and that it was delivered as a part of a process “solely” for the purpose of settling the dispute. The only possible connection that this letter could have towards a settlement is the fact that it was prepared in the course of the grievance process and was a necessary step to be completed before the next step could be undertaken.

Although the grievance process has several steps to try and facilitate settlement, in the end, settlement may not be achieved and an arbitration will be undertaken. It is similar to the adjuster who is working towards settlement but also may be working towards trial as discussed in Hansraj . Indeed, as the vice provost, Mr. James Spark, said in his Affidavit at para 13, the letter was written for the purpose of detailing the Board of Governor’s position for the AASUA. Based on a review of the letter the only resolution that could come after this letter would be if Dr.

Thomson abandoned the process at that point. [ 15 ] Accordingly, upon a review of this correspondence in my view it resembles a position paper more than a compromise of any sort. More specifically, there are no invitations to compromise, no outlines of approaches towards settlement, no recognition of any weaknesses, or any admissions. Said otherwise, there is no “hint” of potential compromise in this correspondence, and as such should not be cloaked with privilege.

It does not meet the test set out by our Court of Appeal in that the letter basically is an “unconditional assertion of rights”. [ 16 ] The Defendant suggested that by failing to allow privilege to stand on this piece of correspondence it could weaken the whole of the grievance procedure in the future. In my view, this claim is somewhat over dramatic. Certainly, the Defendant saw no reason not to enter the start of the grievance procedure as an exhibit in its case - so to start with, the Defendant somewhat opened the door to the grievance process.

Further, it felt that it could cherry pick parts of this letter and put it into its answer to undertaking for the provision of the letter. So the Defendant was not following its own advice in this regard.

But in any event, and more importantly, the rules to protect confidential settlement negotiations are clearly laid out by our Court of Appeal and to the extent that this letter had contained a “hint” of compromise or other settlement effort it would have been protected - so the grievance process will not fall apart and true settlement efforts contained in correspondence will still be kept in confidence. [ 17 ] In oral argument the Defendant’s counsel also argued that if the letter was produced in this action then this would open up the possibility that it could be used elsewhere in other proceedings.

The problem with this argument is that all documents produced in an action are subject to an undertaking that are confidential within a particular action. An application would have be heard to lift this litigation privilege in order to use this document elsewhere. In other words, this document will continue to benefit from litigation privilege and confidentiality protection in that way.

Waiver [ 18 ] It is not necessary to deal with this issue considering my views on the first ground of appeal, however I must say that I was concerned that the University felt that it could put in the part of the letter that helped rebut Dr. Thomson’s evidence that the Governors had “refused to accept” the grievance but then try and keep the rest out. It seems to me that if the University wanted the conclusion of the letter in, then it had to make a choice and allow the whole of the letter in.

Interestingly the AASUA was agreeable that if the University wanted the letter in, they would go along with it (as noted in a letter from the Association to Mr. Sparks’ affidavit and marked as Ex B). In fairness then, I would have allowed the whole of the letter in to put the conclusion in context had I found that settlement privilege attached to it somehow. Relevance [ 19 ] The Defendant also argues that the letter in question should not be produced since it is not relevant to the Application to Strike. Counsel argued that the Board of Governors did not rely upon, nor put into issue the Decision Letter.

Although the Statement of Defence and Affidavit of Dr. Ballerman referred to the grievance dispute initiation by Dr.

Thomson, the assessment of the merits of the dispute and the reasons for finding the dispute to be without merit are not relevant to the determination of jurisdiction. [ 20 ] I agree that the issue of relevance is important when assessing whether any piece of evidence should be considered in an application - and this goes above and beyond the privilege question. [ 21 ] However, this argument would have had more merit had the Defendant not referenced some of the contents of the letter already in this application - more specifically, the decision itself that the grievance was “without merit” in order to correct, in their view, the “misleading information” provided by Dr.

Thomson that the Board of Governors had “refused to accept” a grievance. Considering that the Defendant thought that this was relevant to the jurisdiction issue, and I agree that it is, it is hardly fair to argue that the letter is not relevant. [ 22 ] Further, upon a review of the contents of the letter itself - as previously discussed - it mirrors the factual context laid out in the Statement of Defence and Dr. Ballerman’s affidavit with respect to the history of the interaction with Dr. Thomson from their point of view.

Certainly this factual context is relevant and this is why it is so prominent in the Statement of Defence and Affidavit. It will add to the factual matrix necessary to determine the application. Conclusion [ 23 ] In sum then, I find that the Master erred in misapplying the law with respect to production of settlement privileged information and its application to this correspondence. The letter does not meet the third test in Costello , that is to say that the purpose of the communication was not to attempt a settlement in that it does not contain a hint of compromise in it.

Further, I find in the circumstances that the content of the letter is relevant in reference to the factual context of the relationship between the Plaintiff and Defendant in this matter and the Board of Governor’s position with respect to whether it had accepted and acted upon Dr. Thomson’s grievance process.

[ 24 ] Accordingly, I allow the appeal and the application to have the Defendant produce the full copy of the letter of Dr. Ballerman dated April 30, 2012, along with its attachments. Heard on the 11th day of July, 2013. Dated at Edmonton, Alberta this 11th day of July, 2013. K. M. Eidsvik J.C.Q.B.A. Appearances: Dan W. Hagg, Q.C for the Alan Thomson Kevin S. Feth, Q.C. for the Governors of the University of Alberta