Ivanovic v Howell, 2021 ABQB 438

Court of Queen’s Bench of Alberta Citation: Ivanovic v Howell, 2021 ABQB 438 Date: 20210604 Docket: 0901 12384 Registry: Calgary Between: Darko Ivanovic Plaintiff - and - Tracey Lee Howell, Mark Ryan Kay and Workers' Compensation Board Defendants _______________________________________________________ Reasons for Judgment of the Honourable Justice Anne L. Kirker _______________________________________________________

Table of Contents I. Introduction . 3 II. Issues . 4 III. Evidence and Findings of Fact 4 The September 4, 2005 Assault 4 Mr. Darko’s Injuries . 5 The Place Where the Assault Occurred . 5 The Defendants’ Involvement 5 The Original Action . 10 IV. Analysis . 15 What Were the Relationships Between the Parties and What Rights and Duties Flowed From Those Relationships? . 15 Mr. Ivanovic’s relationship with the Board . 15 Mr. Ivanovic’s relationship with Ms. Howell and Mr. Kay . 17 Did the Defendants Breach Duties Owed to Mr. Ivanovic? . 21 The Board . 21 Ms. Howell and Mr.

Kay . 23 Did Breaches of Duty by the Defendants Cause Mr. Ivanovic to Suffer a Loss? . 24 The trial within a trial 24 Does the evidence establish that the Nation was an occupier? . 33 Does the evidence establish that Canada was an occupier? . 35 What was the standard of care to be met by an occupier? . 36 Does the evidence establish that reasonable care was taken in the circumstances to make Black Bear Crossing reasonably safe for visitors? . 38 What Damages has Mr. Ivanovic Suffered? . 42 V. Conclusion . 42 I.

Introduction [ 1 ] The Plaintiff, Darko Ivanovic, suffered serious injuries when he was assaulted in the course of his part-time employment delivering pizza on September 4, 2005. He was delivering a pizza to a residence in an area known as Black Bear Crossing. That area housed a collection of former army barrack residences once occupied by the Canadian Armed Forces, and now forms part of the Tsuu T’ina Nation Reserve. When the military residents moved out of the residences, various individuals moved in, some of whom were Tsuu

T’ina members. [ 2 ] Mr. Ivanovic’s “accident”, as defined by the Workers’ Compensation Act RSA 2000, c.W-15 , as it read in 2005 (the “ 2005 WCA ”), was reported to the Workers’ Compensation Board (the “ Board ”) by his employer. Mr. Ivanovic received workers’ compensation benefits totalling $16,898.48. [ 3 ] The Board subsequently opted to bring an action in Mr. Ivanovic’s name against the persons liable for Mr. Ivanovic’s losses. The Board sought to recover the cost of the compensation it had paid. Recognizing that Mr.

Ivanovic also had an interest in recovering compensation for the additional damages he had suffered, the Board represented to Mr. Ivanovic that the action would be conducted by its in-house lawyers in the “mutual interest” of the Board and Mr. Ivanovic. [ 4 ] The Defendant, Tracy Howell, was a senior lawyer employed by the Board. Mark Kay was an articling student. They were responsible for the action and for drafting the Statement of Claim that was filed on behalf of the Board and Mr. Ivanovic on August 23, 2007 (the “ Original Action ”). [ 5 ] Together, Ms. Howell and Mr.

Kay made the decision to name three individuals involved in the incident as defendants. They refused Mr. Ivanovic’s request to include the Nation and Her Majesty the Queen in Right of Canada (“ Canada ”), whom Mr. Ivanovic believed might bear liability under the Occupiers’ Liability Act, RSA 2000, c O-4 (the “ OLA ” ) , for the injuries, losses and damages he had suffered. Ms. Howell and Mr. Kay thought that claims against the Nation and Canada were without merit and would expose the Board to an unacceptable risk of an adverse costs award. They did not consider or offer Mr.

Ivanovic the option to pursue the Original Action at his own risk and expense. [ 6 ] Judgment for compensatory damages of $898,465.25 was ultimately obtained against two of the individual defendants named in the Original Action. They had been noted in default, and are impecunious. Consequently, no money has been recovered. [ 7 ] Mr. Ivanovic commenced this action on August 18, 2009, alleging that the Board, Ms. Howell and Mr. Kay breached statutory, contractual, fiduciary and other duties owed to him in failing to name the Nation and Canada in the Original Action. Mr.

Ivanovic claims that but for these alleged breaches of duty, he would have pursued claims against, and recovered compensation for his damages from, the Nation or Canada. He therefore asks that the Defendants in this action be held liable for his losses. [ 8 ] The Defendants deny that they owed duties to Mr. Ivanovic as he alleges. To the extent they say they had obligations to consider Mr. Ivanovic’s interests in pursuing the Original Action, the Defendants claim they discharged those obligations by taking reasonable steps to consider the merits of a claim against the Nation and Canada.

They also maintain that such claims would not have succeeded and consequently, even if a breach of duty is established, Mr. Ivanovic has not proved that he suffered any loss. The Defendants ask that this action be dismissed. II. Issues [ 9 ] There are four stages to the inquiry: (

a) First, I must determine what the relationships were between the parties and what duties flowed from those relationships. (

b) Then, I must determine whether the Defendants breached any duties owed to Mr. Ivanovic. (

c) If so, I must decide whether the breach(es) caused Mr. Ivanovic to suffer any loss. (

d) Finally, and if I am satisfied that a breach of duty by one or more of the Defendants caused Mr. Ivanovic to suffer a loss, I must determine what the quantum of his damages is. [ 10 ] Mr. Ivanovic bears the burden of proof on a balance of probabilities in relation to each of the breach of duty, causation and damages issues: 623455 Alberta Ltd v The Partnership of Jackie Handerek & Forester and Shawn D. Hagen , 2018 ABQB 86 , at para 7 [ 623455 Alberta ], citing Alberta (Workers’ Compensation Board) v Riggins , 1992 ABCA 263 at para 24 [ Riggins ]. III.

Evidence and Findings of Fact [ 11 ] There is little disagreement between the parties about the facts. The September 4, 2005 Assault [ 12 ] Mr. Darko immigrated to Canada in 2002 from Serbia where he attended trade school. He lived in Winnipeg for two years before moving to Calgary in 2004 to attend SAIT. At the time of the September 4, 2005 assault, Mr. Darko was a full-time student upgrading his education to study engineering at university. He worked part-time delivering pizza to help finance his education. [ 13 ] Around 11:00 pm on September 4, 2005, Mr.

Darko was dispatched by his employer to deliver a pizza to 109 Korea Place located in Black Bear Crossing. [ 14 ] When Mr. Darko drove into Korea Place from 37 th Street SW, he noticed the area was dark. The street lights were not working. He found the address and was met at the door by Ms. Justine Crowchild. While Mr. Darko was attempting to process payment for the pizza with the faulty debit card Ms. Crowchild gave him, he was struck in the head from behind by a person subsequently identified as Mr. Desi Cayenne. Mr. Ivanovic turned and dropped the debit machine he was holding.

He remembers trying to retrieve it

and to defend himself. Mr. Cayenne continued to punch and kick him in the head, face and neck. Mr. Cayenne threatened to kill Mr. Ivanovic if he did not give Mr. Cayenne money. Mr. Ivanovic was able to get up and run toward his car. As he did so, he was punched several times by Ms. Terra Crane, who also demanded money. Mr. Ivanovic gave them the money he had and then managed to get into his car and drive away. He made his way back to his place of employment and from there, was taken by ambulance to the Foothills Hospital. Mr. Darko’s Injuries [ 15 ] Mr.

Darko’s injuries are described in detail in the damages judgment of Justice K. Nixon dated April 4, 2014: Ivanovic v Cayenne , 2014 CarswellAlta 832 [ Ivanovic ] . [ 16 ] Upon his arrival at hospital Mr. Ivanovic was diagnosed with “a depressed skull fracture to his right parietal bone, a small subdural hematoma, contusions to his scalp with underlying brain contusions, swelling of the brain, lacerations, soft tissue injuries, and swelling and bruising to his right eye” Ivanovic at para. 4. He remained in hospital for nearly two weeks. Justice Nixon found that Mr.

Ivanovic’s injuries “had lasting effects primarily with respect to mood and emotional problems, fatigue, anxiety and depression and some cognitive problems including inability to concentrate and to process information” and that his “academic abilities were significantly compromised”: Ivanovic at paras 27 and 36. [ 17 ] Justice Nixon awarded Mr.

Ivanovic: general damages of $120,000; past loss of income of $2,100, future loss of income of $743,551, loss of housekeeping in the amount of $10,000, future cost of care in the amount of $7,500 and special damages of $15,314.26, as well as interest, punitive damages, and taxable costs and disbursements. The Place Where the Assault Occurred [ 18 ] The land where Black Bear Crossing was located had been previously leased by Canada as a training ground for the Canadian military. After the military left, vacant housing became occupied by members of the Nation, with the Nation’s knowledge and consent.

Some of the housing became occupied by people who had no permission to be there. [ 19 ] Ms. Crowchild was a member of the Nation and lived in the residence at 109 Korea Place with the permission of the Nation. [ 20 ] Mr. Cayenne lived with Ms. Crowchild, but was not a Nation member. [ 21 ] It is not clear where Ms. Crane lived. She was not a Nation member. [ 22 ] Jonathan Pace, a member of the Tsuu T’ina Nation Police Service (the “ TTNPS ”) from August 2005 until 2010, testified that the Black Bear Crossing area was a “rough part of town”. He described it as rundown, unkempt, and poorly lit.

The street lights were broken or burned out. He said the TTNPS were constantly called to the area to attend to alcohol related complaints, assaults, thefts and property crime reports; he described the area as their “focus and main area for policing.” Mr. Pace advised the Court that he would only attend Black Bear Crossing on police business. It was not a place he would attend if he was off duty and it was not a place, he said, that people would want to attend on their own. The Defendants’ Involvement [ 23 ] After Mr.

Ivanovic’s employer reported his injury to the Board, a claim was opened and the following benefits were paid to Mr. Ivanovic: (

a) Medical aid and rehabilitation benefits of $14,814.26; and, (

b) Income benefits of $2,084.22 [ 24 ] By letter dated October 19, 2005, Terri Wobschall, a legal assistant employed by the Board, asked Mr. Ivanovic to fill out and return an Assault Case Questionnaire. Ms. Wobschall’s letter explained that: [t]he Legal Services Department is reviewing your file to see if legal action can be taken against the (person/people) responsible for this accident. This review does not affect your compensation entitlement. ...

Section 22 of the [2005 WCA] provides that the [Board] “stands in your shoes” and has the right to pursue the (person/people) at fault. If money is recovered you will receive the amount left over once Board costs and legal fees have been paid. Any action against another worker or employer covered by Board is prohibited by law. I am currently investigating the work status of the responsible (person/people) and will contact you again once I have determined if an action can be taken. At that time, we can discuss how the action will be handled and your choice of counsel.

If you hire a lawyer before our investigation is complete, you may have to pay legal fees and costs, even if an action is not allowed. ... [ 25 ] Mr. Ivanovic completed and returned the Assault Case Questionnaire on November 20, 2005. He described what had happened as follows: I was making a pizza delivery and while at the door the customer was having problems with her debit machine transaction and while I

was trying to help her with the machine, I was attacked from behind and struck on the head with an object. He continued to hit and punch me on the head. Then I turned around and a female hit me in the head and the face. [ 26 ] On June 7, 2006, Ron Matthezing, a senior bodily injury adjuster with the Board, sent Ms. Howell an email advising that a worker had been assaulted while delivering pizza to a Nation residence and that the defendant had been charged and was awaiting trial. Mr. Matthezing asked Ms.

Howell: “[a]re we interested in pursuing this matter further and if so can we name the Federal Government as property owner?” [ 27 ] Ms. Howell responded, saying “... [w]e can fly it – unlikely that there would be any money coming from the guy personally.” Ms. Howell was not making any formal decisions about Mr. Ivanovic’s claim at this point. She says she was just providing a quick response to an informal, off-the-cuff inquiry. [ 28 ] On September 29, 2006, Mr. Ivanovic received a letter from Ms.

Jeannine Greig, another WCB bodily injury adjuster, advising him that he was entitled to compensation as a result of his work-related “accident”. She said “[t]here appears to be a right of action available to recover damages from the party who caused the accident.” She went on to explain that: [t]he [Board] is subrogated to any claim you have arising from your injury and may commence an action in your name to recover from the responsible party (section 22 of the Worker’s Compensation Act ). This means that the Board takes over any legal rights you may have as a result of the accident.

Your right to compensation is unaffected by any third party action undertaken by our office. While the [Board] may conduct a personal injury action without your consent, your continued co-operation is essential for a successful outcome. Upon settlement, you will receive all monies leftover after payment of the [Board’s] costs for the claim, legal fees and disbursements. The [2005 WCA] further allows for payment of 25% of the settlement proceeds to you in the event that the amount that can be recovered from the responsible party is less than the Workers’ Compensation Board’s costs for your claim.

The Board would then take a short-fall in the recovery of its costs to that extent. To this end, we wish to ensure that you are completely satisfied with how the action is conducted. …. The [Board’s] solicitors are prepared to conduct the action and the Board will be responsible for all costs or damages, other than those noted in the enclosed Agreement. If you desire to have a solicitor outside the Board act in this matter, the Board may approve of your choice, however, it will not accept responsibility for any costs incurred by you or your legal representative without the authority of the Board.

Any solicitor you choose must be retained by the Board, and will be directed by our solicitors under the authority of

section 22 of the [2005 WCA] . If you wish a solicitor of the [Board] to conduct this action, please complete the attached documents and return them to my attention at this office as soon as possible. Ensure that this is witnessed by a person eighteen or older. If you intend to engage a solicitor outside the [Board], kindly have your solicitor contact me at their earliest convenience to discuss this matter further. It must be clearly understood that the Board does not in any way release or waive its subrogated right in respect of your personal injury. ….. [ 29 ] At the time of Mr.

Ivanovic’s assault, s. 22 of the 2005 WCA provided that: an action could be taken by the worker, with the consent of and on terms satisfactory to the Board; or, by the Board in the name of the worker without the consent of the person in whose name the action was taken. [1] The first option entitled the worker to prosecute the action for damages, but required that the worker bear responsibility for legal fees, disbursements and the risk of costs in the event of an adverse outcome.

The second option allowed the Board to pursue the action, and required the Board to pay any legal fees and disbursements incurred (in the event external counsel was retained by the Board), and to pay any adverse costs award. [ 30 ] In either case, s. 22(4)(

d) stated that: the Board may at any time, whether or not an action has been taken by the Board, the worker, the worker’s legal personal representatives or the worker’s dependents, and whether or not judgment has been given in any action, effect a settlement of the claim for any amount it considers advisable. [ 31 ] Mr. William Ostapek, Board Secretary and General Counsel, testified that the “Board employed [the first] option very rarely, essentially in cases where the chances of either liability or recovery, or both, were very low.” The size of the Board’s claim was also a factor. Mr.

Ostapek said the Board was more likely to consent to the first option “if the [Board] had a very very small interest in any potential litigation.” [ 32 ] Ms. Greig’s September 29, 2006 letter was intended to convey to Mr. Ivanovic that the Board had elected the second option. The letter enclosed a document entitled Workers’ Compensation Board Agreement (the “ WBC Agreement ”) that Mr.

Ivanovic was asked to sign and return. [ 33 ] The WCB Agreement states: WHEREAS I, Darko Ivanovic received personal injury as a result of an accident on Sunday, September 4, 2005, while in the employ of Unit C – Three 73 Inc, under such circumstances as entitle me to a portion of the proceeds of damages obtained from a Third Party; AND WHEREAS I have fully considered the matter and understand that Section 22(1) of the Workers’ Compensation Act , subrogates or transfers, to the [Board] any cause of action I may have against the said Third Party, in respect of any personal injuries I sustained in the said accident;

AND WHEREAS the [Board] is of the opinion there is a valuable cause of action and in this regard it has advised me of the option of selecting a solicitor outside of the Board or having a solicitor of the [Board] effect a settlement or conduct an action in our mutual interest; AND ON CONSIDERTION OF THE OPTIONS it is my desire to have a solicitor of the [Board] look after my interests and to either settle or commence and maintain an action in this matter. I UNDERSTAND that the fees collected by the Board will be as follows:

a) General disbursements at a rate of 2% of the gross recovery;

b) Administrative (legal) fees of 20% of any net recovery by me;

c) Any taxable costs recovered will be paid to the Board; AND THAT I will not be responsible for any further costs for the conduct of the action; AND I FURTHER UNDERSTAND that if a Board solicitor conducts the matter, the Board may at any time effect a settlement of the claim for such amount as it considers advisable and that if an action is taken by the Board, it shall indemnify and save me harmless against all costs or damages awarded by the Court to the Defendant, but excluding any costs which may have been incurred by me without authority of the Board. ... [ 34 ] Mr.

Ivanovic’s wife, Gordana Ivanovic, was authorized to communicate with the Board on Mr. Ivanovic’s behalf. Before Mr. Ivanovic signed the WCB Agreement, she spoke with Ms. Grieg by telephone on October 12, 2006 to find out more about it. Ms. Ivanovic was an articling student at the time of Mr. Ivanovic’s assault and a newly admitted lawyer at the time of her conversation with Ms. Greig. Ms. Ivanovic had little experience with such agreements. Ms. Greig explained how the WCB Agreement worked. Ms.

Ivanovic’s handwritten notes of the call refer to the 2% and 20% amounts the Board would receive as fees and disbursements. Ms. Ivanovic understood it was a contingency agreement and recalls being told that “it didn’t matter if [Mr. Ivanovic] hired the [Board] lawyer or another lawyer. That basically whoever it was would be [Mr. Ivanovic’s] lawyer.” This recollection was not challenged during Ms. Ivanovic’s cross-examination and no evidence to contradict it was presented. I accept that this representation was made to Ms. Ivanovic. [ 35 ] The conversation moved to the circumstances of Mr. Ivanovic’s assault. Ms.

Greig had little information about what had happened. Ms. Ivanovic talked to her about the parties involved and asked about a potential action against Mr. Ivanovic’s employer for sending him to Black Bear Crossing. Ms. Ivanovic also mentioned a potential claim against the Nation. She explained that there had been no lighting in the area and that Mr. Ivanovic believed he might have been able to see his attackers if there had been better lighting. [ 36 ] Ms. Ivanovic’s notes indicate that Ms. Greig told her “it was up to the lawyers to decide who to sue.” Ms.

Ivanovic understood this to mean that the information in relation to Mr. Ivanovic’s assault would be presented to the lawyer and the lawyer would be the person responsible to prepare a proper pleading. [ 37 ] Ms. Greig’s electronic notes state that Ms. Ivanovic advised that she and Mr. Ivanovic would make their decision or submit the documentation in about two weeks. Ms. Greig responded saying that she would await the documentation prior to commencing the investigation. [ 38 ] Ms. Grieg called Ms. Ivanovic on November 14, 2006 to follow up in relation to the WCB Agreement. During this call, Ms.

Greig explained that “as long as the parties do not have an account with Board, then it’s likely we would include the parties in our action.” Ms. Greig asked Ms. Ivanovic to provide a list of the parties that she and Mr. Darko felt were responsible and she would check to determine if they had Board coverage. [ 39 ] Mr. Ivanovic signed the WCB Agreement on November 15, 2006 and on November 17, 2006, Ms. Ivanovic sent a letter to Ms. Greig explaining what she and Mr. Ivanovic knew about the parties they believed may bear liability: (

a) Ms. Ivanovic explained that Mr. Cayenne and Ms. Crane had both been prosecuted and sentenced for the assault. (

b) She questioned whether Ms. Crowchild may have been involved in the set up. (

c) Ms. Ivanovic explained the concern that she and Mr. Ivanovic had about Mr. Ivanovic’s employer and the owner of the pizza company sending Mr. Ivanovic to Black Bear Crossing after an earlier incident in which Mr. Ivanovic experienced a car jacking which left him traumatized and generally scared. Ms. Ivanovic explained that after this incident, Mr. Ivanovic advised his employer that he did not want to deliver to that area anymore, but was told he would have no job if he refused. (

d) With respect to the Nation, Ms. Ivanovic explained: [w]e believe that the Nation should also take responsibility for this crime for several reasons. The main being that they owned the land and there has to be some occupier’s liability on their part as they allowed these people to reside on their property although they were squatters. Furthermore, they did not have adequate lighting and Darko believes he may have been able to see them had there been proper lighting prior to them assaulting him. ... [ 40 ] Ms.

Ivanovic understood there were people on the Black Bear Crossing property that did not belong there (whom she referred to as squatters in her letter to Ms. Greig) from her conversations with TTNPS and with Francis Starlight and Monica Onespot, who appear to have served in victim services roles for the Nation. Her understanding was also informed by conversations she had with the

prosecutor in the criminal proceedings against Mr. Cayenne and Ms. Crane. [ 41 ] Ms. Ivanovic spoke with Ms. Greig again on November 20, 2006. Ms. Grieg had confirmed Mr. Ivanovic’s employer could not be sued because the corporation and owner both had Board coverage. Ms. Greig advised that there was no Board account listed for the Nation and that she would ask Ms. Howell about a claim against the Nation and the individuals involved. She also noted that she would make a request for the TTNPS file. [ 42 ] Ms. Grieg sent an email to Ms.

Howell that day stating: I’ve got a claim in which the worker was delivering pizza to the Nation reserve and was subsequently beaten up by squatters. Can you please advise if we can pursue recovery against Tsuu T’ina and or the squatters. [ 43 ] Ms. Howell responded the next day saying: “.... [s]ue everyone and we’ll sort it out later.” Ms. Howell testified that her responding email did not reflect a decision about how to proceed, but rather was “just kind of like a note to [her]self to think about this going forward.” [ 44 ] Ms. Greig received the WCB Agreement signed by Mr.

Ivanovic on November 29, 2006, and sent a form letter that day asking him to keep her informed about his medical condition. [ 45 ] Ms. Greig followed up with Mr. Ivanovic again in March 2007 about commencing the claim process. The Original Action [ 46 ] In June 2007, Ms. Greig advised Ms. and Mr. Ivanovic that the file was being transferred to Ms. Howell for future handling. She requested demographic searches for Mr. Cayenne and Ms. Crane and a corporate search for the Nation before the file was transferred. She also completed a standard form Statement of Claim Checklist & Preparation Data Sheet.

She noted that the “[a]ssault took place on the Nation reserve therefore should be named as a defendant under occupier liability.” [ 47 ] Ms. Howell’s paralegal prepared the first draft of the Statement of Claim in July, 2006. It named Desi Cayenne, Terra Crane, Justine Crowchild, and the Nation as defendants. [ 48 ] The draft was provided to Ms. Howell for review. At the time, Ms. Howell was the only lawyer in the Board’s third party litigation department. She testified that she was the person who made the decisions about who to name as defendants and what causes of action to pursue.

She said it was not her practice to involve the worker in these decisions. [ 49 ] Ms. Howell has no specific memory of reviewing the information that was on Mr. Ivanovic’s file, but testified that it was her practice to review the information collected by the bodily injury adjuster, which in this case appears to have included: (

a) A Worker’s Information Release signed by Mr. Ivanovic authorizing Ms. Ivanovic to act as his representative and communicate with the WCB; (

b) The Employer’s Report dated October 12, 2005; (

c) The correspondence sent to Mr. Ivanovic by Ms. Wobschall in October 2005; (

d) The Assault Case Questionnaire completed by Mr. Ivanovic in November 2005; (

e) The correspondence exchanged between Ms. Grieg and Mr. and Ms. Ivanovic in September through November, 2006; (

f) The Statement of Claim Checklist and Preparation Data Sheet completed by Ms. Greig on June 5, 2007; and, (

g) the following documents that Ms. Greig had obtained: the results of demographic searches for the individuals involved; the results of the corporate search Ms. Greig completed for the Nation, and a copy of the police report Ms. Greig obtained from Constable Pace on or about June 7, 2006. [ 50 ] Ms. Howell testified that it was her practice to have the adjuster’s electronic notes printed and provided to her with the physical file. She could not, however, recall whether she received a hard copy in this case. [ 51 ] Ms. Howell does recall discussing Mr. Ivanovic’s case with Mr.

Ostapek, who was then Director of Legal Services, after the Statement of Claim was first drafted. Ms. Howell recalls that she had a concern about “the costs implications or potential cost implications [that] would’ve been significant.” She explained that she had a “general understanding at the time that [the Nation] had either retained new counsel or they had specific counsel that defended these matters very vigorously and pursued their costs, especially if a body such as the Board [was] involved.” [ 52 ] Following her discussion with Mr. Ostapek, Ms. Howell asked her paralegal to instruct Mr.

Kay to do some research in relation to naming the Nation and Canada as defendants in the Original Action. [ 53 ] Mr. Kay recalls receiving instruction from the paralegal. He also recalls a discussion with Ms. Howell in which they discussed an “initial opinion” that it would not be proper to name the Nation or Canada because to do so would expose the Board to a potential costs award. [ 54 ] Mr. Kay conducted some legal research and then prepared an undated memo (the “ Research Memo ”). He summarized the facts as he understood them as follows:

The worker was injured when he was delivering a pizza to a premise (sic) on the Nation Reserve. While trying to secure payment from one of the defendants, Ms. Crowchild, he was assaulted from behind by the two other defendants, Mr. Cayenne and Ms. Crane. We are suing Mr. Cayenne, Ms. Crane and Ms. Crowchild. Ms. [Ivanovic] believes that the Nation and Canada should also be named. Our initial opinion was that it would not be proper to name the Nation and Canada. To do so would expose us to a potential costs award. [ 55 ] Mr.

Kay acknowledges that the only evidence he reviewed was the information on the Board’s physical file. He did not recall seeing Ms. Greig’s electronic notes. He took no additional steps to familiarize himself with the facts of Mr. Ivanovic’s case. No land title search was conducted for 109 Korea Place or the housing in Black Bear Crossing; no research into the owner of 109 Korea Place or the land where Black Bear Crossing was located was done. No witnesses were interviewed. No photographs of the area were obtained. Mr.

Kay acknowledges that he had no information about what may, or may not, have been known by the Nation about the situation in the Black Bear Crossing area at the time of Mr. Ivanovic’s assault. [ 56 ] Mr. Kay’s Research Memo summarized each of the cases he reviewed and concluded: Based on my review of the case law there is no cause of action against either [the Nation] or Canada for negligence or under the Occupier’s Liability Act (sic). There is no evidence to suggest that it was foreseeable by either the Nation or Canada that the assault would have occurred on the reserve.

This is sufficient to dispose of both the negligence cause of action and the Occupier’s Liability argument. Furthermore, it is unlikely that the Occupier’s Liability Act (sic) would apply to either [the Nation] (sic) as neither would be considered an “occupier” under the Act.” [ 57 ] Mr. Kay gave his memo to Ms. Howell who reviewed it briefly before leaving on holiday on August 10, 2007. She recalls that she and Mr. Kay were “on the same page”. She left Mr. Kay in charge of finalizing the pleading before her return to the office on August 31, 2007, just before the Labour Day weekend. [ 58 ] Ms.

Howell acknowledged during her cross-examination that “foreseeability is a fact and evidence-driven determination” and that to have any understanding of foreseeability, [she] would require a full understanding of the evidence and facts.” Ms. Howell was also asked the following questions and gave the following answers: Q. … And, Ms.

Howell, would you agree with me that as a lawyer, if you don’t go out and investigate, speak to witnesses, victims, the potential plaintiff, or the Tsuu T’ina police, view the crime scene, then of course there would be no evidence to determine foreseeability for the potential cause of action researched by Mark Kay in this matter? A. Are you suggesting that as a lawyer – I’m not – I’m not sure what you’re suggesting. Q.

My suggestion is that as a lawyer if you do not take steps to ascertain the material facts, the relevant witnesses, the particular evidence to support those facts, then there may be no facts to support the cause of action in [the] case. A. As a general principle I guess I would agree with that. Yeah. [ 59 ] On August 14, 2007, Mr. Kay telephoned Ms. Ivanovic and advised her that he did not think there was any reason to name the Nation or Canada as defendants in the action and that he planned to name the two individuals involved in assaulting Mr. Ivanovic and Ms. Crowchild. Ms.

Ivanovic recalls being confused by Mr. Kay’s explanation and asking Mr. Kay whether she could assume conduct of the matter. She recalls Mr. Kay telling her no because the Board “owned the claim”. Mr. Kay does not deny using those words. Ms. Howell acknowledges that they were words she used as shorthand for referencing s. 22 of the 2005 WCA. [ 60 ] Mr. Kay offered to name John Doe and 123 Corp. as placeholder defendants, something he had discussed with Ms. Howell before she left the office for her vacation. Ms. Howell confirmed that the decision to name John Doe and 123 Corp. was a “compromise” to satisfy Ms.

Ivanovic’s concerns that the Nation was not being named. Ms. Howell explained: “...they were placeholder defendants such that if additional information came to light further down the road, those – those potential defendants would be preserved.” [ 61 ] Mr. Kay’s memo to file dated August 14, 2007 confirms Ms. Ivanovic’s recollection of her conversation with him. His memo to file states: I spoke with the injured worker’s wife, [Ms. Ivanovic], regarding naming the Federal Crown and T’sui Tsu (sic) Nation.

I explained that based on my research (see previous memo to file) we would not be advancing a claim against the Federal Crown and the T’sui Tsu (sic) Nation. Ms. [Ivanovic] indicated that she had case law to suggest that the Crown should be held responsible. She did not elaborate on this. Mr. (sic) [Ivanovic] queried the possibility of having the file transferred to her. I explained that if she wished to do so, she would need to sign a retainer agreement with the Board and take directions from us. I referred her to

section 22 of the WCA. She was unsure how she wanted to proceed. I informed her I would be filing a Statement of Claim against the two individuals who assaulted Mr. Ivanovic as well as the occupier of the house. We also named John Doe in case there is an unknown owner/occupier of the house. I also agreed to name 123 Corp as another potential owner/occupier of the land. Ms. [Ivanovic] indicated she may want to speak with [Ms. Howell] when she returned to the office at the end of the month. [ 62 ] Mr. Kay proceeded to file a Statement of Claim naming the three individuals, Mr. Cayenne, Ms. Crane and Ms.

Crowchild, and naming John Doe and 123 Corp. on August 23, 2007. With respect to the occupier liability claims, the Statement of Claim pleaded that: At all material times, insofar as is known to Mr. Ivanovic, Ms. Crowchild was the owner and/or occupier of the Property.

In the alternative, the Defendant John Doe (Mr. Doe), insofar as is known to Mr. Ivanovic, was at all material times, the owner and/or occupier of the Property. In the further alternative, the Defendant 123 Corp (“123”) insofar as is known to Mr. Ivanovic, was at all material times, the owner and/or occupier of the Property. [ 63 ] In relation to Ms. Crowchild and the placeholder parties, Mr. Kay pleaded that Mr. Ivanovic’s assault was caused by their negligence, “ ... some particulars of which include, but are not limited to the following: failing to take reasonable care to see that Mr.

Ivanovic would be reasonably safe in his attendance on the Property.” [ 64 ] Mr. Kay also pleaded the OLA . [ 65 ] Ms. Ivanovic learned that that Statement of Claim had been filed on August 27, 2007, when she received an unfiled copy of the pleading. [ 66 ] She sent an urgent letter to Ms. Howell’s attention on August 30, 2007 stating: We acknowledge receipt of your fax dated August 27, 2007 enclosing an unfiled copy of the Statement of Claim. We confirm the advice of your student-at-law, Mark, that the Statement of Claim was filed on Thursday, August 23, 2007.

Upon reviewing the Statement of Claim, we note that it does not name all of the parties who may be liable to Darko Ivanovic. Particularly, it fails to name the Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada as defendants. We understand that Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada own and control the lands upon which the assault took place. We refer you to the recent Alberta Court of Appeal decision of Peshee v Tsuu T’ina Nation , [2007] A.J. No. 680 , in which the band sought to evict Ms.

Peshee from the units at Black Bearing Crossing. Ms. Peshee alleged that she had the consent of the chief and band council to occupy the unit. The findings of fact by the initial Chambers Justice and the Court of Appeal suggest that the chief, Indian band and Crown had control over the units at Black Bear Crossing at the time that Mr. Ivanovic was assaulted.

We are concerned that the present defendants, although liable, will be impecunious and that the yet unnamed Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada may escape liability as a result of not being named as defendants in the Statement of Claim. We recommend that the Statement of Claim be amended to add Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada as defendants.

We also recommend that the following allegations be added: At all material times, the Defendants, Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada, were owners and occupiers of the property and had control over the property. The Defendants, Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada, negligently caused or contributed to the injuries to and damages of the Plaintiff, the particulars of which are as follows: 1. They allowed onto their property people who they knew or ought to have known to be dangerous. 2.

They allowed or permitted onto their property people who they knew or ought to have known had a propensity or disposition for violence. 3. They allowed or permitted onto their property people who they knew or ought to have known had previous criminal convictions for violent crimes or assault. 4. They failed to warn the Plaintiff of the risk of being assaulted or injured by people occupying and living on their property. 5. They failed to remove people from their property who were not authorized to be there. 6.

They failed to remove people from their property when they knew or ought to have known of their disposition for violence. 7. Such further and other particulars as may be proven at trial. As legal counsel for WCB and in advancing claims on behalf or Mr. Ivanovic, you have a professional obligation and fiduciary duty to act in the best interests of WCB and Mr. Ivanovic. We think it prudent that you add Tsuu T’ina Nation, Chief Sandford Big Plume and Her Majesty the Queen in Right of Canada and add the suggested allegations to the Statement of Claim. The limitation date for this matter is September 4, 2007.

Accordingly, the suggested amendments will need to be done prior to that date. [ 67 ] She also left telephone messages for Ms. Howell and with her assistant. [ 68 ] Ms. Ivanovic followed up by telephone on September 4, 2007, which was the last day of the limitation period. Ms. Howell returned her call at 3:15 pm that day. Ms. Howell explained to Ms. Ivanovic that the Board was concerned about costs of litigating a claim against the Nation. Ms. Ivanovic’s notes indicate that Ms. Howell said “the Nation always defends and defends vigorously and they [didn’t] want to pay the costs of that.” Ms.

Ivanovic’s notes also indicate that Ms. Howell stated they would get default judgment against the others and garnish what they could. Ms. Howell acknowledges that this was one strategy discussed. [ 69 ] Ms. Howell advised Ms. Ivanovic that she agreed with Mr. Kay’s research and that even if Ms. Ivanovic’s law firm took the case, the Board would not consent to naming the additional parties identified in Ms. Ivanovic’s August 30, 2007 letter. According to Ms.

Ivanovic’s notes, Ms. Howell said the Board “owned the claim and they decide.” Ms. Howell acknowledges that she advised Ms. Ivanovic that any law firm retained by Mr. Ivanovic would have to “take their instructions from the [Board].” [ 70 ] The limitation period expired without the Statement of Claim being amended to include the Nation or Canada. IV. Analysis What Were the Relationships Between the Parties and What Rights and Duties Flowed From Those Relationships? [ 71 ] The relationships between Mr. Ivanovic and the Board, and between Mr. Ivanovic and Ms. Howell and Mr. Kay are different. [ 72 ] Mr.

Ivanovic’s relationship with the Board and its employees is informed by the provisions of the 2005 WCA and the WCB Agreement Mr. Ivanovic signed. [ 73 ] His relationship with Ms. Howell and Mr. Kay is additionally informed by the duties and professional responsibilities owed by lawyers to their clients. Mr.

Ivanovic’s relationship with the Board [ 74 ] Section 17(1) of the 2005 WCA provided the Board with exclusive jurisdiction “...to examine, inquire into, hear and determine all matters and questions under [the] Act ...”. [ 75 ] Section 17(2) stated that no action could be “... maintained or brought against the Board or any member of the Board in respect of any act or decision done or made in the honest belief that it was within the jurisdiction of the Board.” [ 76 ] It is not disputed that s. 22 of the 2005 WCA gave the Board considerable control over actions taken against third parties: Alberta (Workers' Compensation Board) v Gutierrez , 2005 ABCA 110 [ Gutierrez ]. [ 77 ]

Section 22 did not, however, eliminate Mr. Ivanovic’s right of action: The

section specifically contemplates the worker bringing an action for damages against a third party not covered by the Act . That right is subject to the Board’s consent on terms satisfactory to the Board. The

section subrogates the worker’s right of action to the Board. Its purpose is twofold, to allow the worker to bring the action and to protect the Board’s legitimate interest in the action. The

section gives the Board significant control over the prosecution of the action, including the requirement that it approve any settlement. It also provides that the Board may take an action in the name of the worker without the worker’s consent and may settle a claim without the worker’s consent. In other words, s. 22 gives the Board considerable control over the action. However, that control does not eliminate the worker’s right of action under s. 22. … Gutierrez at paras 8 and 9 . [ 78 ] The Board was entitled to protect its legitimate interests in any action taken in Mr.

Ivanovic’s case, but in doing so, had a duty to act in good faith within this statutory mandate. [ 79 ] In O'Fearghail Holdings Ltd v Bignold , 2001 ABQB 514 this Court drew a connection between good faith and an honest belief, noting at para 21, as follows: The following definition of good faith has been referred to by some courts in this context.

It is from Black's Law Dictionary , 5th edition: Good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief , the absence of malice and the absence of design to defraud or to seek an unconscionable advantage, and an individual's personal good faith is [a] concept of his own mind and inner spirit and, therefore may not conclusively be determined by his protestations alone. Dole v. Gordon, 158 N.Y.S. 2d 248 , 259, 260.

Honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. An honest intention to abstain from taking any unconscientious advantage of another, even through technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render transactions unconscientious. In common usage this term is ordinarily used to describe that state of mind denoting honesty of purpose, freedom from intention to defraud, and, generally speaking, means being faithful to one's duty or obligation. Efron v. Kalmanovitz, 249 Cal.

App. 197. [emphasis added] [ 80 ] In Gutierrez , the Court stated as follows at para 10: No legitimate reason has been advanced for the condition the Board has imposed in granting the consent contemplated. There are no public policy considerations behind the Board's position nor is there any legal basis for it. The Board acknowledges that the condition is unnecessary to protect its interest in any litigation undertaken by the worker. Moreover, it does not reflect the statutory intention of s. 22(1) . The

section contemplates the initiation of an action by a worker. The impugned condition is beyond the Board's legislative mandate . On any standard of review, the imposition of this condition cannot be sustained. Accordingly, the Board cannot impose this condition as a requirement of its consent under s. 22(4)(b). [emphasis added] [ 81 ] In Goodhart Estate v Alberta Energy Regulator , 2016 ABQB 469 , at para 24 , this Court queried whether an absence of good faith might be implied in instances in which an entity acts contrary to, or otherwise ignores, its statutory mandate.

[ 82 ] Read together, these authorities confirm that to benefit from the immunity provided in s. 17(2), the Board was required to at least turn its mind to how, pursuant to the 2005 WCA, Mr. Ivanovic’s interests might be protected in the circumstances. [ 83 ] The purpose of s. 22, as it was written at the time of Mr. Ivanovic’s injury, is reflected in the WCB Agreement Mr. Ivanovic was asked to sign. The Board’s represented to Mr.

Ivanovic that it would consider his interests as well as its own in apparent recognition that it had an obligation under the legislation to do so. [ 84 ] To establish a breach of the duty of good faith owed to Mr. Ivanovic by the Board, Mr.

Ivanovic bears the burden of proving that the Board acted deliberately with intent to cause harm - which captures the classical concept of bad faith - or acted in a manner “…so markedly inconsistent with the relevant legislative context …” that the Court cannot reasonably conclude that the Board’s decisions were taken in the honest belief that they were consistent with the scope and purpose of s. 22: See Scherle v Treadz Auto Group Inc , 2019 ABQB 987 , at para 253 , citing Enterprises Sibeca inc c Frelighsburg (Municipalité) , 2004 SCC 61 at para 26 , regarding the test for bad faith in a legislative context.

See also Fitzpatrick v The College of Physical Therapists of Alberta , 2020 ABCA 164 para 17 , or (with more discussion on this point) Condominium Corp No 9813678 v Statesman Corp , 2009 ABQB 493 at paras 263-265 (aff’d 2012 ABCA 265 ). Mr. Ivanovic’s relationship with Ms. Howell and Mr. Kay [ 85 ] The Defendants argue that in the circumstances of this case, it is not reasonable to conclude that any solicitor-client relationship existed between Mr. Ivanovic and Ms. Howell and Mr.

Kay. [ 86 ] I respectfully disagree. [ 87 ] A Court may find that a lawyer client relationship exists if “a reasonable person in the position of the party with knowledge of all the facts would reasonably form the belief that the lawyer was acting for a particular party”: Jeffers v Calico Compression Systems , 2002 ABQB 72 [ Jeffers ] at para 8 . [ 88 ] This is consistent with the Code of Professional Conduct , Calgary: Law Society of Alberta, 2007, ch 6 .1(1)(f), in force in 2007 when Ms. Howell and Mr. Kay became responsible for the Original Action (the “ Code of Conduct ”).

Both were bound by its terms. “Lawyer” was defined to include both active members of the Law Society of Alberta as well as students-at-law. “Firm” included lawyers employed by a common employer, and the Code of Conduct defined the term ‘client’ as follows: “Client” is defined as generally including a person on whose behalf the lawyer renders professional services and with whom the lawyer has a current lawyer/client relationship, but may also include a person who reasonably believes that lawyer/client relationship exists. [ 89 ] The Defendants point to the facts that: the WCB Agreement did not use the word “retainer”; Mr.

Ivanovic was not required to pay legal fees; and, there was minimal communication between Ms. Howell and Mr. Kay on the one hand and Mr. and Ms. Ivanovic on the other, to say there was no solicitor-client relationship. I do not find these facts determinative. [ 90 ] As this Court noted in Jeffers , it is not necessary that a person formally retain a lawyer before a solicitor/client relationship can be found.

Rather, the Court may look to a number of indicia in determining whether such a relationship exists, with the overarching question being whether a reasonable person would believe that the lawyer was acting on behalf of a given party (para 8). [ 91 ] From the outset, the Board represented to Mr. Ivanovic that “his right to compensation [was] unaffected by any third party action undertaken by [its] office” and that the Board wished “to ensure that [he] was completely satisfied with how the action [was] conducted.” [ 92 ] Ms. Ivanovic understood from what she was told that whether Mr.

Ivanovic decided to have an in-house Board lawyer or external counsel retained by the Board conduct the action, the lawyer would protect his interests as well as the interests of the Board. [ 93 ] Ms. Ivanovic’s understanding is supported by the

preamble of the WCB Agreement that states Mr. Ivanovic was advised “of the option of selecting a solicitor outside the [Board] or having a solicitor of the [Board] effect a settlement or conduct an action in our mutual interest ” and that in signing the Board Agreement Mr.

Ivanovic was confirming his “desire to have a solicitor of the [Board] look after my interests ...” [emphasis added] [ 94 ] Moreover, and as already mentioned, while s. 22 gave the Board considerable control over any action taken against a third party – whether by a worker themselves on terms acceptable to the Board, or by the Board in a worker’s name – it did not eliminate the worker’s right of, or interest in, an action taken: Gutierrez , at para 10 . [ 95 ] The issue addressed by the Court of Appeal in Gutierrez was whether the Board was permitted by s. 22 of the 2005 WCA to insist that it be the “sole client” as a condition of the Board consenting to the worker taking action themselves (at para 9). [ 96 ] The Board in Mr.

Ivanovic’s case did not offer this option to Mr. Ivanovic. It elected, instead, to proceed with an action in Mr. Ivanovic’s name. The Board urges me to distinguish Gutierrez on this basis and find that as a result of the Board’s election, no solicitor- client relationship existed. [ 97 ] Although the facts in this case may be slightly different from those in Gutierrez , I find that the principle emerging from Gutierrez still applies. Whatever the Board chose to do, it could not extinguish Mr.

Ivanovic’s rights as a client to have his interests protected by the lawyer responsible for the Original Action within the statutory framework of the WCA. [ 98 ] I am satisfied that a solicitor-client relationship existed. That relationship meant that duties were owed by Ms. Howell and Mr. Kay to both the Board and Mr. Ivanovic. [ 99 ] What were their duties in the circumstances?

[ 100 ] Both parties called expert evidence in relation to the standard of care expected of a lawyer representing a plaintiff’s interests in a civil action. Both agreed that Ms. Howell was required to exercise reasonable care, skill, knowledge in overseeing Mr. Kay’s work and in addressing the potential claims against the Nation and Canada on the basis of occupier’s liability law. [ 101 ] This is consistent with what Renke J. said at paras 63-65 of 623455 Alberta where he explained: A lawyer’s duties to a client and the standard of care that must be met are set by contract, tort, and fiduciary law.

Absent special contractual terms, the duties and standards set by contract and tort are the same. Liability is concurrent ... Lawyers are also regulated by professional ethical rules. While ethical rules may inform the determination of whether contractual, tortious, or fiduciary duties have been met, “professional responsibility and civil liability remain two separate matters” ... A lawyer is required to bring reasonable care, skill, and knowledge to the performance of the professional services that the lawyer has undertaken for the client.

The standard of care is that of the reasonably or ordinarily competent or prudent lawyer ... [citations omitted] [ 102 ] In this case, it is not a complete answer to Mr. Ivanovic’s claim to say that Ms. Howell and Mr. Kay took reasonable steps to consider the merits of a claim against the Nation and Canada. Because they were acting for both the Board and Mr. Ivanovic, it was also necessary that they discharge the obligations set out in

Chapter 6, Rule 2 of the Code of Conduct in relation to conflicts of interest. [ 103 ] Neither of the experts specifically addressed the conflict of interest issue - they were not asked to do so. That said, and while courts must be cautious about setting the standard of care absent expert evidence, I find I can properly address the issue because knowledge of the standard in these circumstances would fall within the common knowledge of all members of the Court: St. Denis v Carlson , 2018 ABQB 268 [ St. Denis ] at paras 46-49 . [ 104 ]

Chapter 6, Rule 2 of the Code of Conduct stated: A lawyer must not act for more than one party in a conflict or potential conflict situation unless all such parties consent and it is in the best interests of the parties that the lawyer so act. [ 105 ] The commentary to this Rule explained, at C.2.1, that: “Conflict” means the situation existing when the parties in question are prima facie differing in interest but there is no dispute among the parties in fact.

Examples include vendor and purchaser, mortgagor and mortgagee, insured and insurer, estranged spouses, and lessor and lessee. “Potential conflict” means the situation existing when the parties in question are prima facie aligned in interest and there is no dispute among the parties in fact, but the relationship or circumstances are such that there is a possibility of differences developing.

Examples are co-plaintiffs; co-defendants; co-insured; shareholders entering into a unanimous shareholder agreement; spouses granting a mortgage to secure a loan; common guarantors; beneficiaries under a will; and a trustee in bankruptcy or court-appointed receiver/manager and the secured creditor who had the trustee or receiver/manger appointed. [ 106 ] The Board and Mr.

Ivanovic were clients in the former category; they had prima facie differing interests in the action, but at the outset, there was no dispute between them in fact. [ 107 ] The Code of Conduct that was in place then, as now, recognizes that there are situations in which it is in the best interests of the parties that a lawyer represents both of them. In Board subrogation cases, s. 22 mandated it, eliminating the obligation on the part of Ms. Howell and Mr.

Kay to independently evaluate whether the representation was permissible. [ 108 ] But, this statutory permission did not, in my view, eliminate the professional obligations Ms. Howell and Mr. Kay had to provide full and fair disclosure to both the Board and Mr. Ivanovic in relation to the options for legal representation available under s. 22 and to obtain their fully informed consent to proceeding with one or the other.

Nor did it eliminate their duties to pause and address any conflict in fact that arose, and to obtain all parties’ consent to the continued representation: Commentary C.2.2; see also MTM Commercial Trust v Statesman Riverside Quays Ltd , 2015 ABCA 142 , paras 19-22 (in relation to overall duties regarding conflict) leave refused [2015] SCCA No 251. [ 109 ] With respect to Ms. Howell’s oversight of Mr. Kay’s work as a student-at-law,

Chapter 2, Rule 4 of the Code of Conduct stated that “a lawyer may assign to support personnel only those tasks that they are competent to perform and must ensure that they are properly trained and supervised.” The commentary (C.4.2) to the Rule, provided the following guidance with respect to students-at-law: A lawyer has particular duties and obligations with respect to students-at-law. … A student-at-law is uniquely in need of support and supervision. A student’s work and ability to deal with clients must be monitored on an ongoing basis.

Each student should be alerted to common pitfalls such as the misuse of precedents, excessive reliance on staff, and inattention to proofreading and other detail. Accessibility and receptiveness to students are important aspects of a proper program of supervision and training. [ 110 ] A number of provincial law societies across the Country have adopted similar directions outlining the guidance to be provided by a principal to an articling student.

As noted by the Court in R v Moran (2008) , 69 MVR (5th) 228 (Ont SCJ) at paras 41-42 : ...it is the articling principal who is responsible for providing effective supervision to the student according to all the circumstances of the situation, including the complexity of the matter... ...Should it ultimately transpire with the degree of supervision exercised by the principal over the student was insufficient, that is a matter for which the principal must answer ultimately to his client...[emphasis in original]

See also Adderley v 1400467 Alberta Ltd, 2014 ABCA 291 paras 11-12. Did the Defendants Breach Duties Owed to Mr. Ivanovic? [111] In my view they did. The Board [112] When the dispute about including the Nation and Canada in the Original Action arose, Ms. Howell and Mr. Kay did not stopand address it. Instead, they erroneously advised Mr. and Ms. Ivanovic that the Board “owned the action” and proceeded as Ms. Howelldetermined was appropriate to avoid the risk of an adverse costs award against the Board. [113] The Board did not own the action. When, through Mr. Kay and Ms.

Howell, it represented that it did, the Board overstated itsjurisdiction. [114] I respectfully disagree with the Defendants’ suggestion that in Pe Ben Oilfield Services

(2006) Ltd v Arlint, 2017 ABQB 678, atparas 62 and 68, Hughes J. (as she then was) decided that the meaning of s. 22 of the 2005 WCA was not changed by the 2005amendments. Justice Hughes was asked to interpret s. 23 of the Act. In so doing, she merely observed that “sections 22 and 23 appear[ed]to have generally the same purpose and function ... as they did prior to the 2005 [a]mendment” and that the “addition of vesting [in s. 22]appear[ed] to merely reinforce that the WCB retains control over an injured worker’s ability to commence and advance a civil action”:para 68. [115] When Ms.

Ivanovic asked - twice - whether her firm could act on the matter, the Board, through both Mr. Kay and Ms. Howell,refused, other than on terms that would have the Board instructing counsel and refusing to have the Nation and Canada named asdefendants in the action. [116] As had occurred in the Gutierrez case, the Board’s position had the effect of excluding, entirely, one of the statutory optionsthen available to reasonably protect both worker and the Board. It essentially eliminated Mr.

Ivanovic’s right of action, at least againstthe Nation and Canada, something the Court of Appeal made clear it was not entitled to do. [117] The Defendants argue that the Board had the statutory right to take the action in Mr. Ivanovic’s name without his consent, andthat once they made that election, the Board had no obligation to consent to different terms. [118] With respect, this argument ignores what the Court of Appeal in Gutierrez said about the statutory intention of s. 22(1), whichonly gave the Board a right of subrogation, and it takes too narrow and rigid a view of what s. 22(2) allowed.

It attempts to address whatwas, in reality, an unjustified refusal on the part of the Board to consider that Mr. Ivanovic’s case was one of those rare circumstanceswhere, according to Mr. Ostapek, the Board would allow a worker to take the action themselves. [119] I pause to note that subrogation was an undefined term in the 2005 WCA.

In Ledingham v Ontario (Hospital ServicesCommission) (SCC), [1975] 1 SCR 332, at p 337, the Supreme Court of Canada adopted the following quote concerningthe equitable concepts surrounding subrogation: The doctrine of subrogation is a creature of equity not founded on contract, but arising out of the relations of the parties. […] Theprimary consideration is to see that the insured gets full compensation for the property destroyed and the expenses incurred in makinggood his loss.

The next thing is to see that he holds any surplus for the benefit of the insurance company. [emphasis added] [120] While Ledingham is distinguishable on the facts, it is helpful in the sense that it underscores how pursuant to s. 22 of the 2005WCA, Mr. Ivanovic’s interest in recovering full compensation could not simply be disregarded. [121] It was anticipated the individual defendants would be unable to pay any judgment. Ms. Howell considered that they would notdefend and that the Board and Mr. Ivanovic would be left to note them in default and collect what they could.

It was, in other words,unlikely the Board would recover much, if any, of the approximately $16,000 it sought to obtain from the individuals. During histestimony, Mr.

Kay acknowledged that he understood a decision to exclude the Nation or Canada “was in essence a decision that [Mr.Ivanovic, and by extension the Board] would obtain no money or compensation” for their losses and damages. [122] Given what little it stood to gain, the Board was understandably concerned about the potential for an adverse costs award inpursuing an occupier’s liability claim in the context of an intentional tort. [123] But, the Board had a duty to consider Mr. Ivanovic’s interests in exercising its statutory authority. He had suffered life alteringinjuries.

The risk benefit analysis was very obviously different for him. The Board, through Mr. Kay and Ms. Howell, had enoughinformation about Mr. Ivanovic’s injuries to recognize this. [124] At no point did the Board consider, or transparently explain, the option that was available to allow Mr. Ivanovic to take theaction at his own risk and expense. As in Gutierrez, consent on these conditions would have provided the Board with sufficientprotection against the risk of costs it was not prepared to take, and allowed Mr.

Ivanovic’s counsel to commence and prosecute the actionagainst the Nation and Canada as he sought to do. The Defendants provide no public policy reason or legal impediment that preventedthe Board from allowing the matter to proceed in this way once the conflict of interest between the Board and Mr. Ivanovic materialized. [125] In all of these circumstances, I find that the Board’s conduct was markedly inconsistent with the relevant legislative context.Ms. and Mr. Ivanovic were led to believe that there was nothing they could do. I am not suggesting that there was any deliberate

intention to cause Mr. Ivanovic harm – there is no evidence of that. But, had the Board, through Ms. Howell and Mr. Kay, turned its mind to the applicable statutory framework, its decisions could not be fairly characterized as taken in the honest belief that they were consistent with the scope and purpose of s. 22. [ 126 ] In this sense, I find that the Board breached the legislative and contractual duty it owed to Mr. Ivanovic. [ 127 ] Given this conclusion, I find it unnecessary to determine whether the Board owed, or breached, any fiduciary duties. Ms. Howell and Mr. Kay [ 128 ] Ms.

Howell candidly acknowledged during her testimony that everything Mr. Kay did, he did with her authority. I accept that throughout his involvement, Mr. Kay proceeded as Ms. Howell determined was appropriate. As an articling student, he was expected to - and did - act under her direction and supervision in providing advice: R v Bhander , 2010 BCSC 1239 para 68 . [ 129 ] I find that Ms. Howell, and under Ms. Howell’s supervision, Mr.

Kay, negligently breached the professional responsibility and common law duty they had to address the conflict in fact that arose when they recognized that their clients had different views about pursuing an occupier’s liability claim against the Nation and Canada. They did not breach the special duty of trust that exists between lawyers and their clients in the sense that they did not favour their own interests over those of Mr. Ivanovic’s in failing to address the conflict. Consequently, I cannot say that the breach was a breach of fiduciary duty: see St.

Denis at paras 81-82 . [ 130 ] The conclusion that there was no merit to naming the Nation or Canada in the Original Action was also negligently reached, and is belied by the decision to plead claims against John Doe and 123 Corp. If there was no basis for an occupier’s liability claim on the basis that the assault against Mr. Ivanovic was not foreseeable, and that neither the Nation nor Canada satisfied the definition of “occupier,” why plead it at all? [ 131 ] Ms. Howell and Mr. Kay both candidly acknowledge that they did not have all of the relevant facts.

They could not, therefore, have reasonably concluded that an occupier’s liability claim would fail on either ground. [ 132 ] Further, naming placeholder defendants so that claims against potential defendants would be preserved, did not preserve Mr. Ivanovic’s right to sue the Nation or Canada as Ms. Howell evidently thought it would. [ 133 ]

Section 3 of the Limitations Act , RSA 2000, c L-12 , provides immunity from liability where a plaintiff fails to file a Statement of Claim within two years from the date on which he knew, or in the circumstances ought to have known, that the injuries he sustained were attributable to that defendant. [ 134 ] Here, the alleged facts upon which a cause of action might be based were known to Ms. Howell and Mr. Kay. They had enough information to know, or with reasonable diligence to learn, who owned, and who occupied, the property in question.

They were alive to the possibility that these entities may have failed to take steps to ensure that visitors would be reasonably safe in using the premises. There was information in the file provided by Ms. Ivanovic about poor lighting and unauthorized residents. This is not an instance where a placeholder defendant was required because the identity of a proper party or the nature of the injury were unknown. [ 135 ] Ms. Howell and Mr. Kay believed they had enough information to draw conclusions in relation to the foreseeability question.

This would be more than sufficient to provide immunity to the Nation and Canada under sections 3 and 6 of the Limitations Act if an attempt was made to add them to the Original Action after the expiry of the two-year limitation period. [ 136 ] As to the conclusion that neither the Nation or Canada could be considered occupier’s under the occupier’s liability legislation, it was reached without review of the facts, or the Indian Act , RSC, 1985, c I-5 , and it was, for reasons explained further below, incorrect. [ 137 ] In sum, I find that Ms. Howell and Mr. Kay, under Ms.

Howell’s supervision, negligently breached the contractual duties they owed to Mr. Ivanovic pursuant to the WCB Agreement and the concurrent common law duty of care they owed to Mr. Ivanovic: (

a) to reasonably investigate the facts and competently assess the strengths and weaknesses of the available claims before any decision was made not to pursue those claims; and, (

b) to address the conflict in fact that arose between their clients in a way that protected the interests of both the WCB and Mr. Ivanovic within the statutory framework. Did Breaches of Duty by the Defendants Cause Mr. Ivanovic to Suffer a Loss? [ 138 ] It is clear that Mr. Ivanovic lost the opportunity to pursue his claim against the Nation and Canada. I am satisfied that had the Defendants permitted Mr.

Ivanovic to retain his own counsel, and had they explained that as a condition of consent, he would have to accept responsibility for any legal fees and disbursements incurred and the risk of an adverse costs award, he would have pursued the claim. [ 139 ] However, the question requires Mr. Ivanovic to prove more than this. For Mr. Ivanovic to establish that he has suffered a loss that entitles him to more than just nominal damages, I must also be satisfied that the claim against the Nation, and Canada had a reasonable prospect of success. [ 140 ] Courts approach this part of the analysis as follows.

The trial within a trial [ 141 ] Generally, a plaintiff in Mr. Ivanovic’s position must establish that ‘but for’ the professional defendants’ negligence, he would

have succeeded in recovering the damages he claims in the original action. As explained by Martin J. (as she then was) in Adeshina vLitwiniuk & Co, 2010 ABQB 80 at para 5 [Adeshina], relying on Riggins at para 17: ... [c]ases for negligence against lawyers are unusual in that in addition to the trial on the issue of professional negligence another mustbe conducted on the cause of action that should have proceeded but for the lawyer's negligence.

In each trial, it is the plaintiff who bearsthe burden of proof in both the professional negligence action and the substantive cause of action. [142] The Court must make “a determination of the merits of the underlying action, as can be best accomplished”: Adenshina at para4. [143] In Ashraf v Zinner, 2019 ABQB 389 (aff’d 2020 ABCA 207, leave to appeal to SCC refused (2021 CarswellAlta 46), this Courtsaid this at paragraph 45: …I am aware in Alberta that in considering professional negligence cases the Court's practise is, where necessary, to consider what loss(if any) is occasioned by the lawyer's breach of duty.

This is done, where possible, by conducting a "trial within a trial." The reason for atrial within a trial is a simple one. It is not always obvious that an action if it had been brought, or brought properly, would havesucceeded.

Therefore, the trial within the trial asks the trial judge to consider the hypothetical action that the plaintiff would have hadagainst the original defendant "but for" the negligence of the professional, including the issues of liability, causation and damages. [144] In discussing how damages are to be quantified in those instances where a trial within a trial is required, this Court commentedas follows, at para 414 in Adeshina: In those decisions the courts stated that three results were possible in the trial within a trial held where the lawyer negligently missed alimitation period.

First, the trial judge could find that had the case gone to trial the plaintiff would have been successful, in which case100 per cent of the lost damages would be awarded against the solicitor. Second, the trial judge could find that the plaintiff would nothave been successful, in which case only nominal damages would be awarded. Finally, where time has passed to such an extent that a"trial within a trial" would be impossible the court must, to the best of its ability, calculate the value of the opportunity lost to theplaintiff and award damages against the lawyer on that basis.

Thus, in the unusual circumstances when it has become impossible toconduct a trial within a trial, a loss of chance damage assessment is awarded. Normally the law has been reluctant to view the loss of achance as recoverable. [145] In other words, where the Court determines that the plaintiff would have succeeded on the merits of the underlying action, thena damages assessment is undertaken to determine the full amount of the damages suffered as a result of the loss of opportunity to bringthe claim.

See for example, Page v Solicitor (1971), (NB CA), 20 DLR (3d) 532 (NB Sup Ct App Div) at paras 27-28and 45, and the comment in Riggins at para 22 considering the merits of the underlying claim. [140] Conversely, where the Court determines that the original action, properly brought, would have failed, then only nominal damagesare awarded because nothing has been lost: see for example Fisher v Knibbe, 1992 ABCA 121 [Fisher] (cited to (1992) 125 AR 219),and Stealth Enterprises Ltd v Hoffman Dorchik, 2003 ABCA 58 [Stealth Enterprises]. [146] Difficulty arises when the circumstances of the case make proving the original cause of action exceptionally difficult orimpossible, thus requiring the court to quantify the “lost chance”: Kitchen v Royal Air Force Association, [1958] 1 WLR 563 (UKCA)[Kitchen]. [147] In addressing damages for the loss of a chance in Folland v Reardon (2005), (ON CA), 249 DLR (4th) 167,the Ontario Court of Appeal at paras 75-76, explained that: Recovery for lost chances based on lawyers' negligence either in advising clients, or in conducting litigation, is well established in thecommon law…[citations omitted] The solicitor's negligence cases ... address liability in terms of the negligence of the solicitor's conduct, but assess damages usingcontractual principles.

In most solicitor's negligence cases, liability rests in both contract and tort. Where ... the contractual and tortliability is concurrent, [there is] no reason to assess damages for what is essentially the same wrong in a different manner whenconsidering contractual liability and liability in negligence: BG Checo International Ltd. v. British Columbia Hydro and PowerAuthority, (SCC), [1993] 1 S.C.R. 12, [1993] S.C.J.

No. 1, at pp. 37-8 S.C.R. [148] In a breach of contract context, a plaintiff must establish that, but for the defendant’s wrongful conduct, the plaintiff had achance to obtain a benefit or avoid a loss.

The plaintiff must then show that the chance lost “was sufficiently real and significant to riseabove mere speculation”: Strategic Acquisition Corp v Starke Capital Corp, 2017 ABCA 250 at paras 75-78, referencing KipfinchDevelopments Ltd v Westwood Mall (Mississauga) Ltd (2008), (ON SC), 50 BLR (4th) 233 (Ont SCJ) (rev’d in parton question of quantification; 2010 ONCA 45) which cites Folland at paras 73-74. [149] Mr. Ivanovic urges me to find that the merits of his claim against the Nation and Canada are made out on the evidence he hasbeen able to provide.

He argues that the evidence is sufficient to prove both liability and causation on a balance of probabilities (hisdamages having already been determined). [150] In the alternative, if I am not satisfied, on a balance of probabilities, that the Nation and/or Canada breached the duties Mr.Ivanovic claims they owed to him and thereby caused his loss, Mr. Ivanovic argues that I may quantify damages on the basis of his lostchance. He does not argue that a trial within a trial is impossible in the circumstances of this case. When expressly questioned on thispoint, counsel for Mr. Ivanovic indicated that Mr.

Ivanovic was not taking that position. [151] Rather, in effect, he argues that a loss of chance damage assessment is fairly undertaken in two circumstances: one, where a trialwithin a trial is not possible; and, two, in cases where the available evidence reveals no “clear winner”, but the plaintiff has established a“real chance” of success.” In support of this submission Mr. Ivanovic cites, among other authorities, Kitchen and 623455 Alberta, at

paras 227-231. [ 152 ] The Defendants take the position that assessing damages based upon a lost chance where a trial within a trial is possible is contrary to the law in Alberta. They rely upon the Court of Appeal decisions in Fisher and Stealth Enterprises to say that Mr. Ivanovic has tried, but failed, to prove the underlying cause of action on a balance of probabilities, and that his damages must therefore be nominal. [ 153 ] Given the divergence between the parties’ positions with respect to the application of the loss of chance doctrine in Alberta, it is helpful to review what the cases they rely upon say.

However, for the reasons explained below, I find that the issue raised by Mr. Ivanovic’s alternative argument is not one that I must resolve in this case. [ 154 ] It is not disputed that Kitchen is one of the seminal cases of assistance in assessing causation and damages in instances of a lawyer’s negligence. The plaintiff in Kitchen brought an action against her solicitors alleging negligence in their handling of a claim following the death of her husband by electrocution . The solicitors failed to inform the plaintiff about her possible claim before the limitation deadline passed.

They had not obtained an expert report addressing the cause of the electrocution, and because the electrical installation in issue had been replaced, no conclusive evidence about the cause of the accident was available when the claim against the solicitors was tried.

After noting that the actual cause of the electrocution remained unknown, the Court of Appeal went on to address whether the conduct of the defendant solicitors caused the plaintiff any compensable injury. [ 155 ] Lord Evershed held as follows, at 574-575: I come last to what may be the most difficult point of all; namely, assuming that she has established negligence [on the part of the defendant law firm], has the plaintiff proved anything other than nominal damages?

It is necessary to say something of the nature of the problem which (as I understand the law) the court has to solve in determining the measure of damages in such a case as this. [The defendants’ solicitor’s] point is that we now have to consider the question of liability as between the plaintiff and the electricity company…as though it were a distinct proceeding within the present action; and [the defendant] says that, if we find on balance against the plaintiff, that is to say, that she fails in her claim against the electricity board (considered as if it were a separate and existing proceeding), then it follows that her damage is no more than nominal.

If that is the right approach, it must follow that in any such case as the present the result expressed in terms of money is always all for the plaintiff or nothing. I cannot, for my part, accept that as the right formulation of the problem. If, in this kind of action, it is plain that an action could have been brought, and if it had been brought that it must have succeeded, of course the answer is easy. The damaged plaintiff then would have recovered the full amount of the damages lost by the failure to bring the action originally.

On the other hand, if it be made clear that the plaintiff never had a cause of action, that there was no case which the plaintiff could reasonably ever have formulated, then it is equally plain that the answer is that she can get nothing save nominal damages for the solicitors negligence. … But the present case falls within neither one nor the other of the categories which I have mentioned. There may be cases where it would be quite impossible to try “the action within the action” as [the defendant] asks.

It may be that for one reason or another the action for negligence is not brought till, say, twenty years after the event and in the process of time the material witnesses or many of them have died or become quite out of reach for the purpose of being called to give evidence. In my judgment, what the court has to

[…]