2015 QCCA 782, 2015 QCCA 782

Churchill Falls (Labrador) Corporation Ltd. c. Hydro-Québec 2015 QCCA 782 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025054-156 (500-17-078217-133) MINUTES OF THE HEARING DATE: April 17, 2015 THE HONOURABLE MADAM JUSTICE GENEVIÈVE MARCOTTE, J.A. PETITIONER ATTORNEY / COUNSEL CHURCHILL FALLS (LABRADOR) CORPORATION LIMITED Mtre LOUIS P.

BÉLANGER ABSENT (Stikeman Elliott) RESPONDENT ATTORNEY / COUNSEL HYDRO-QUÉBEC Mtre PIERRE BIENVENU Mtre DOMINIC DUPOY ABSENTS ( Norton Rose Fulbright Canada ) DESCRIPTION: Requête pour permission d’appeler d’un jugement interlocutoire rendu le 4 février 2015 par l’honorable François Rolland, juge en chef de la Cour supérieure, district de Montréal. (Art. 29 et 511 Code de procédure civile) Clerk: Asma Berrak Courtroom: RC-18

HEARING 9:30 Continuation of hearing held on April 14, 2015. See Judgment – Page 3. End of the hearing. Clerk BY THE JUDGE JUDGMENT [ 1 ] The Churchill Falls (Labrador) Corporation Limited (hereinafter, CF(L)Co) seeks leave to appeal a declaratory judgment of the Superior Court, District of Montreal (Honourable François Rolland), rendered on 4 February 2015. [1] Rolland CJ declared that Mr. Lorne Carrier is not a person “represented by an advocate” under

article 3.02.01 (

h) of the Code of ethics of advocates [2] and that Hydro- Québec’s counsel could therefore communicate with Mr. Carrier to discuss facts and obtain documents pertinent to the ongoing litigation, excluding privileged communications. [3] [ 2 ] The issue underlying the motion for leave is the scope of

article 3.02.01 (

h) of the Code of ethics of advocates . [ 3 ] The judgment that CF(L)Co is seeking to appeal falls within the context of a Motion for declaratory judgment commenced by Hydro-Québec (hereinafter, HQ) in July 2013, in relation to the

interpretation of a contract signed by HQ and CF(L)Co in 1969, which motion is scheduled to be heard in mid-October 2015. [ 4 ] Further to being provided by Rolland CJ with a copy of a letter transmitted by Mr. Carrier to Silcoff J. in July 2014 , HQ’s counsel advised CF(L)Co’s counsel in writing of his intention to meet privately with Mr. Carrier. [ 5 ] Counsel for CF(L)Co objected to the communication alleging that

article 3.02.01 (

h) of the Code of ethics of advocates prevented any communication between HQ’s counsel and Mr. Carrier because, as CF(L)Co’s former Vice-president and Chief Financial Officer, and former executive from 1971 to 1977, he is a person “represented by an advocate”. [ 6 ] As a result, HQ sought a declaratory judgment from the Superior Court that

article 3.02.01 (

h) did not apply to communications between HQ’s counsel and Mr. Carrier. [ 7 ] In declaring that

article 3.02.01 (

h) did not apply, Rolland CJ placed significant weight on the fact that: 8.1 Mr. Carrier arrived after, and thus was not part of contractual negotiations and agreements between HQ and CF(L)Co; 8.2 Mr. Carrier left CF(L)Co prior to the period in which the parties began to litigate their contractual disputes; 8.3 Mr. Carrier’s statements that his information was of a factual nature and was acquired prior to joining CF(L)Co; 8.4 Mr. Carrier had not been employed by CF(L)Co for 37 years. [4] [ 8 ] CF(L)Co contends that Mr.

Carrier’s statements demonstrate that his knowledge was not of a purely factual nature or limited to the period during which he was employed at CF(L)Co. [ 9 ] The statements made by Mr.

Carrier in his written letters to counsel for HQ and CF(L)Co specify that the bulk if not the entirety of his knowledge was gained by him while he was an officer at Brinco and arose prior to the disposal of Brinco’s interest in favor of CF(L)Co and was fixed prior to his leaving Brinco to join CF(L)Co. [5] He refers to this knowledge as follows: I worked for Brinco and in that capacity was most involved with the developments in Labrador. This included the desire of Prov. of Nfld to expropriate Brinco’s interest in CFLCo. I was involved in the sale of Brinco’s interest to Nfld of its (Brinco’s interest in CFLCo.

I want you to know that my knowledge of CFLCo largely arose from my Brinco interest in Labrador in general. (sic) [6] [ 10 ] In the matter of Elitis Pharma inc. c. RX Job inc. [7] , this Court underlined the principle that, prior to granting leave to appeal of an interlocutory judgment, the judge in chambers must be satisfied that this judgment is one contemplated by the first paragraph of

article 29 C.C.P., in that it either decides the issues in part, orders something that cannot be remedied by final judgement or unnecessarily delays the matter.

[ 11 ] More recently in Cree Nation of Mistissini c. Baie–James (Municipalité de) [8] , my colleague Bich J, reiterated the statutory limits of the competence of the Court of appeal judge sitting in chambers, referring to the principles set out in Elitis Pharma inc. [9] [ 12 ] While other judgments relating to the Anti-Contact rule have been found to fall within the scope of

article 29 C.C.P., such as in Caisse populaire Desjardins de La Malbaie c. Tremblay [10] , and Filion c. Québec (Procureure générale) [11] , the Respondent contends that contrary to those cases, the judgment from which the Petitioner is seeking leave to appeal does not contain any order. It merely confirms the right of HQ’s counsel to meet privately with Mr. Carrier without contravening

article 3.02.01 (

h) of the Code of ethics of advocates . As such, it does not preclude the Petitioner from raising objections at the hearing should Carrier’s testimony bring about concerns regarding the communication of privileged or otherwise protected information. For this reason, the judgment is not one that cannot be remedied by final judgment. [ 13 ] Even if I were to assume that the requirements of article 29(2) C.C.P. are met as suggested by CF(L)Co [12] , I am of the opinion that the pursuit of justice does not, in any event, require that leave to appeal be granted pursuant to

article 511 C.C.P. [ 14 ] The underlying issue in this motion for leave is the scope of the Anti-Contact Rule and whether or not Mr. Carrier is a person "represented by an advocate" pursuant

article 3.02.01 (

h) of the Code of ethics of advocates , which states: The following acts, among others, are a breach of the obligation to act with integrity: … (

h) communicating in a matter with a person whom he knows to be represented by an advocate except in the latter's presence or with his consent or unless he is authorized to do so by law; [ 15 ] Rolland CJ laid out the three objectives of

article 3.02.01 (h): [26] Il ressort de la jurisprudence et de la doctrine que l’

article 3.02.01 (

h) a trois objectifs, soit : 1. la protection des justiciables; 2. la préservation de l’intégrité du processus judiciaire en s’assurant que la stratégie de la

partie n’est pas divulguée à la

partie adverse; 3. la protection de la relation professionnelle existant entre l’avocat et son client. [ 16 ] Expanding on the principles underlying

article 3.02.01 (h), authors Deslandes and Lanctôt state that: Le devoir de loyauté et de courtoisie de l’avocat envers les autres avocats lui impose aussi de ne pas communiquer directement avec la

partie adverse sans le consentement préalable de l’avocat de cette partie. Cette règle vise d’abord et avant tout à sauvegarder l’intégrité de la relation client-avocat, mais elle vise également à empêcher l’avocat d’influencer ou d’exploiter un adversaire qui manque d’expérience et de connaissances juridiques. Ainsi, l’avocat ne doit jamais transiger ou négocier avec une

partie représentée par un avocat, si ce n’est par l’intermédiaire de ce dernier ( art. 3.02.01 , al.

h) C.d.a.). Il serait trop facile en effet de « passer par-dessus la tête » de l’autre avocat et éventuellement d’amener cette

partie à consentir des concessions sans l’appui de son conseiller. … La règle vaut aussi à l’égard de la personne qui, sans être avocat, a légalement le droit de représenter autrui. (…) l’article 3.02.01

h) C.d.a. interdit de communiquer avec la

partie adverse peu importe la forme, le contenu et le but de la communication. [13] [ 17 ] I fail to see how extending

article 3.02.01(

h) as CF(L)Co’s counsel’s suggests, could provide his client with the protection the

article is meant to provide. [ 18 ] Mr. Carrier is not currently represented by counsel and is not involved in the ongoing litigation between HQ and CF(L)Co. and in my opinion, the principles and objectives underlying

article 3.02.01(

h) are not served by extending its protections to communications between Mr. Carrier and HQ's counsel. [ 19 ] The integrity of the judicial process and the client-solicitor relationship is not threatened by HQ's counsel communicating with Mr. Carrier. More importantly, there is little risk that HQ's counsel will influence or exploit Mr. Carrier, given that, as he claims and Rolland CJ accepted, his knowledge is of a factual nature and was largely if not entirely gained while an officer at Brinco and not at CF(L)Co. [ 20 ] Examining cases involving the application of

article 3.02.01(

h) further supports the refusal to extend the scope of the Anti- Contact Rule to communications between Mr. Carrier and HQ's counsel. [ 21 ] In Caisse populaire Desjardins de La Malbaie c. Tremblay, Caisse populaire appealed a decision granting Tremblay’s motion for the authorization for his lawyers to communicate with witnesses who were either current or former employees of Appellant. The motion occurred in the context of Tremblay’s action against the Appellant for wrongful dismissal. In dismissing the appeal and denying the application of

article 3.02.01(h), Morissette J relied on the fact that the potential witnesses with which Tremblay’s counsel wished to communicate had not participated in the dismissal and had not been delegated any decision-making powers. [14] [ 22 ] At trial, Pelletier J clearly outlined the circumstances under which

article 3.02.01(

h) protections apply to communications with employees or ex-employees:

Le seul fait que des employés soient à l'emploi ou aient déjà été à l'emploi d'une entreprise

partie au litige et qu'ils aient une connaissance personnelle des faits est insuffisant, en lui-même, pour les considérer comme

partie prenante au litige. Aux fins de déclaration d'inhabilité pour manquement à l'article 3.02.01 alinéa h) du Cda, les employés doivent, en plus, avoir joué un rôle décisionnel dans leur entreprise et avoir participé activement au fait générateur du litige. Autrement, comme toute autre personne extérieure à la structure corporative, ces personnes se limitent, sans plus, à pouvoir agir comme de simples témoins des faits et ne peuvent, par conséquent, être considérées comme étant la

partie elle-même. [15] [ 23 ] Writing for the Court of Appeal, Morissette J reaffirmed the scope of

article 3.02.01(

h) with respect to current and former employees: [13] Dans ses motifs, le juge de première instance identifie deux questions en litige, qu’il formule comme suit : 1)

Malgré les devoirs de discrétion et de loyauté que lui impose l’

article 2088 C.c.Q. , le salarié peut-il témoigner en faveur d’un tiers dans le cadre d’un processus judiciaire opposant ce dernier à l’entreprise de son employeur? 2) Le salarié, placé dans une telle situation, peut-il être considéré comme la

partie elle-même? Il répond par l’affirmative à la première question et par la négative à la seconde. [14] Je ne trouve rien à redire sur l’analyse que fait le juge de ces deux questions. D’une part, le devoir de loyauté et de discrétion qui découle de l’

article 2088 C.c.Q. n’est assurément pas assimilable, en soi, à une forme de secret professionnel. Il ne saurait donc faire obstacle à l’obligation d’un témoin, fût-ce l’employé ou l’ex-employé d’une

partie au litige, de dire ce qu’il sait lorsqu’il dépose en justice, même si cela avantage un tiers au détriment de son employeur. D’autre part, l’employé ainsi appelé à déposer ne devient pas de ce seul fait une

partie au litige. Ces deux propositions paraissent évidentes, comme le démontre d’ailleurs l’exposé du juge de première instance, auquel je m’en remets. […] [22] Une personne morale, cela va de soi, agit en dernière analyse par l’entremise de personnes physiques, lesquelles peuvent être investies par délégation du pouvoir de prendre des décisions en son nom. Mais dans les faits, la demande de l’intimé ne vise aucune personne qui aurait été dans cette situation, et le paragraphe 3.02.01

h) du Code de déontologie des avocats , même interprété très libéralement, demeure donc inapplicable. [23] Il est exact que souvent, dans des contextes voisins de celui qui a cours en droit québécois, on a codifié les règles déontologiques de la profession d’avocat afin d’étendre la portée de l’interdiction correspondant au paragraphe 3.02.01 h) .

L’employé susceptible d’engager la responsabilité d’une personne morale dans l’exécution de ses fonctions est ainsi parfois assimilé à cette personne morale. [ 24 ] In Axa insurance c Groupe de sécurité Garda , [16] Léger J dismissed Garda’s application to disqualify Axa’s counsel. In November 2001, subsequent to a fire, Axa sued Garda alleging that one of its employees had started the fire. Axa’s counsel communicated with an ex-employee of Garda who had left the company in 2000, prior to the fire occurring.

Garda sought to have Axa’s counsel disqualified on the grounds that this communication constituted a breach of

article 3.02.01(h). Léger J held that

article 3.02.01(

h) did not apply to communications between Axa’s counsel and the ex-employee because, having left in 2000, the ex-employee had not possessed any power to bind Garda or make decisions in its name during the period in which the litigation arose. [17] [ 25 ] In Daco Archery Inc. c. Topo Productions inc., [18] Durocher J granted a motion to disqualify Daco’s counsel because it had communicated with Topo Production’s ex-President. The ex-President had testified in the litigation as a representative of Topo Productions while she was its President. Durocher J held that

article 3.02.01(

h) applied because employees who are involved in litigation as a representative of a company do not lose this classification within the scope of the litigation, even if they leave the company. [19] [ 26 ] Similar to Daco, in Wittenborg A/S c. Unibrew inc. , [20] the Superior Court held that 3.02.01(

h) applied to the ex-CEO of the defendant for two main reasons. First, the ex-employee had held the highest ranking position in the company. Second, he had left the company less than two years prior to the commencement of the proceedings and his departure occurred near the period in which the parties began to prepare for litigation. [21] [ 27 ] To summarize, Quebec courts have generally extended the protections provided by 3.02.01(

h) to an ex-employee where the ex- employee either (1) held a strategic position in the company (i.e. possessed the power to make decisions on behalf of the company or bind the company) and actively participated in the facts that led to the dispute [22] or (2) was involved in the litigation or occupied a top- ranking position when the litigation unfolded. [23] [ 28 ] Mr. Carrier does not fit either of these situations. He joined CF(L)Co subsequent to it concluding the disputed contracts with HQ and left prior to the litigation between the parties commencing. Therefore, it was not possible for Mr.

Carrier to have possessed the power to bind CF(L)Co or make decisions in its name during the period in which CF(L)Co and HQ negotiated and finalized the disputed contracts or began litigating their contractual disputes. Furthermore, given that he left CF(L)Co prior to the parties engaging in litigation over the disputed contracts, he was not involved in the ongoing litigation. [ 29 ] Moreover, when reading the entirety of Mr.

Carrier’s written communications with counsel for HQ and CF(L)Co, it appears that much of his information is already public, and thus cannot be subject to privilege, [24] or of a factual nature. [ 30 ] CF(L)Co’s right to non-disclosure of privileged information is recognized, [25] as is Mr.

Carrier’s obligation to not disclose privileged or confidential information. [26] However, CF(L)Co’s arguments attempt to stretch the Anti-Contact Rule to apply to all ex-employees who may possess confidential information that “may be of use in the litigation” regardless of whether the ex-employee was employed when the facts that gave rise to the dispute occurred, or whether the ex-employee was involved in the litigation.

[ 31 ] The protections afforded in

article 3.02.01(

h) are aimed at safeguarding against harm not present here, and the principles and objectives underlying the protections are not furthered by extending them to the present context. The circumstances are also far from those in which the protections in

article 3.02.01(

h) have been extended to ex-employees. [ 32 ] As a result, I am unable to conclude that, in such context, the pursuit of justice requires that leave to appeal be granted, especially where such appeal would likely delay the hearing already scheduled in mid-October 2015. THEREFORE, THE UNDERSIGNED: [ 33 ] DISMISSES the motion for leave to appeal; [ 34 ] THE WHOLE with costs. GENEVIÈVE MARCOTTE , J.A.