2014 NBCA 39, 2014 NBCA 39

COURT OF APPEAL OF COUR D'APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 87-13-CA 89-13-CA BRENDA G. NOBLE, Q.C. and MARY-EILEEN O’BRIEN APPELLANTS BRENDA G. NOBLE, c. r. et MARY-EILEEN O’BRIEN APPELANTES - and - - et - DENIS ARSENAULT and LISE ARSENAULT RESPONDENTS DENIS ARSENAULT et LISE ARSENAULT INTIMÉS Noble and O’Brien v. Arsenault and Arsenault, 2014 NBCA 39 Noble et O’Brien c.

Arsenault et Arsenault, 2014 NBCA 39 CORAM: The Honourable Chief Justice Drapeau The Honourable Justice Deschênes The Honourable Justice Quigg CORAM : l’honorable juge en chef Drapeau l’honorable juge Deschênes l’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: August 14, 2013 Appel d’une décision de la Cour du Banc de la Reine : le 14 août 2013 History of Case: Historique de la cause : Decision under appeal: 2013 NBQB 258 Décision frappée d’appel : 2013 NBBR 258 Preliminary or incidental proceedings: [2013] N.B.J. No. 256 [2013] N.B.J.

No. 257 Procédures préliminaires ou accessoires : [2013] A.N.-B. n o 256 [2013] A.N.-B. n o 257 Appeal heard: January 16, 2014 February 6, 2014 Appel entendu : le 16 janvier 2014 le 6 février 2014

Judgment rendered: February 6, 2014 Jugement rendu : le 6 février 2014 Reasons delivered: June 16, 2014 Reasons for judgment: The Honourable Justice Quigg Concurred in by: The Honourable Chief Justice Drapeau The Honourable Justice Deschênes Counsel at hearing: For the appellant Brenda G. Noble, Q.C.: Darren G. Blois For the appellant Mary-Eileen O’Brien: Matthew R. Letson For the respondent Denis Arsenault: Marie-Claude Bélanger-Richard, Q.C.

For the respondent Lise Arsenault: Brenda McMullen Brown Motifs déposés : le 16 juin 2014 Motifs de jugement : l’honorable juge Quigg Souscrivent aux motifs : l’honorable juge en chef Drapeau l’honorable juge Deschênes Avocats à l'audience : Pour l’appelante Brenda G. Noble, c.r. : Darren G. Blois Pour l’appelante Mary-Eileen O’Brien : Matthew R. Letson Pour l’intimé Denis Arsenault : Marie-Claude Bélanger-Richard, c.r. Pour l’intimée Lise Arsenault : Brenda McMullen Brown THE COURT These reasons for decision follow an order made on February 6, 2014, dismissing the appeal.

Each appellant will pay costs of $5,000 to each respondent. The Court’s reasons for decision were delivered by QUIGG, J.A.

I. Introduction [ 1 ] The Court’s decision to uphold the order rendered in first instance reflects the application of an elementary proposition: appeals are from the actual disposition of the case, not from reasons given in support: Veno v. United General Insurance Corporation , 2008 NBCA 39 , 330 N.B.R. (2d) 237 , at para. 77 ; J.D. Irving, Limited v. Hughes and Astle , 2010 NBCA 23 , 358 N.B.R. (2d) 49 , at para. 24 . After hearing the parties, we dismissed the appeal from the Bench, having concluded the disclosure and production order under appeal, which was carefully formulated, was sound.

Usually, in those circumstances, we avoid commenting on obiter dicta found in the reasons for decision in the court below. However, because the underlying proceedings between the respondents (husband and wife) are ongoing and some of the dicta may negatively affect their ability to prosecute claims or defences, as the case may be, the incidental statements must be addressed. [ 2 ] The present appeal opposes litigants to their former lawyers.

It also provides this Court with its first opportunity to consider the process of collaborative family law and invites a consideration of: (1) the responsibilities to clients of lawyers engaged in the process and, in particular, their responsibilities in the event a marriage contract achieved through that process is challenged; and (2) whether the process gives rise to a class privilege to the benefit of the participating lawyers. The asserted privilege would allow them to deny their respective clients’ requests for disclosure of process-related information and documents.

As will be seen, consideration of those matters brings into play the role of the Rules of Court in proceedings in the Family Division and, more specifically, the effect of Rule 31.11 (Documents in the Possession of a Person Not a Party) and Rule 32.10 (Discovery Where Leave is Required). II. Background [ 3 ] The relevant facts for present purposes are generally straightforward and not contested by the parties.

To set out the background against which this appeal was decided, I borrow liberally from the written submissions, as well as the motion judge’s reasons for decision, indicating any factual discrepancy where appropriate. I would point out, however, that the following are not findings of fact that bind the parties going forward. [ 4 ] Denis Arsenault and Lise Arsenault married in November, 1985. There are two adult children of this marriage. During the marriage, Mr. Arsenault founded and operated several businesses. Mrs. Arsenault worked at NB Power until 1996, when she left to stay home with their children.

Occasionally, she carried out some work for the family businesses. Mr. Arsenault is presently 52 years of age, while Mrs. Arsenault is 54. In 2006, the parties were experiencing marital difficulties. Although they agreed to remain married and cohabit until their youngest child graduated from high school, at Mr. Arsenault’s suggestion, they explored the possibility of preparing a marriage contract which would settle their financial affairs and parental obligations in the event they did separate.

Despite the fact they resided in Moncton, the parties preferred to retain outside solicitors, and they were encouraged to pursue negotiations of the marriage contract through the “collaborative law” process. As a result, Mr. Arsenault retained Brenda Noble, Q.C., and Mrs. Arsenault retained Mary-Eileen O’Brien, both lawyers practicing in Saint John. [ 5 ] On July 19, 2006, the parties and their respective lawyers executed a Collaborative Law Contract, which set out rules for the collaborative law process and touched upon the duties and responsibilities of the spouses and their counsel.

A review of the contract indicates it addresses issues of confidentiality, disclosure and the procedure to be followed if the collaborative law process is unsuccessful. On November 6, 2006, after a series of meetings at which the parties and their lawyers were in attendance, a marriage contract was signed. [ 6 ] On May 19, 2009, Mr. Arsenault informed Mrs. Arsenault that he intended to leave the marriage. They both agreed that this would not be disclosed to their children until after their son’s graduation, which was to occur the following month.

On June 23, 2009, the parties advised their children of the breakup of their marriage. [ 7 ] The parties then took action pursuant to the marriage contract they had executed three years prior. They transferred title to various properties, and divided other marital property including the contents of residences and RRSPs. Medical and dental insurance benefits continued to be provided by Mr. Arsenault to Mrs. Arsenault. Also, Mr. Arsenault continued to split income with his spouse until, as per the marriage contract, the periodic spousal support obligations were triggered. Mr.

Arsenault paid child support and post-secondary educational expenses, but Mrs. Arsenault later contended he did not fully comply with these obligations. [ 8 ] Mr. Arsenault then decided to convert the periodic spousal support payments to a lump sum amount in accordance with the formula provided in the marriage contract. On August 30, 2011, he paid $653,013.06 to Mrs. Arsenault.

This sum purported to include spousal support and an amount relating to an equalization of assets. On December 14, 2010, Mr. Arsenault filed a Petition for Divorce seeking corollary relief in accordance with the terms of the marriage contract. On March 30, 2011, Mrs. Arsenault filed an Answer and Counter-Petition wherein she contested the claim for corollary relief on a number of grounds including unconscionability and non-disclosure.

She stated: […] “the Marriage Contract … is unconscionable in the circumstances and should be set aside regarding the division of marital and non- marital property and debts, on the grounds of non-disclosure, improper valuations, inducement to sign and verbal promises by the Petitioner”. [para. 19] [ 9 ] In the Counter-Petition, Mrs. Arsenault specifically claimed: (

a) a divorce; (

b) under the Divorce Act : (

i) Child support for M.A.A., born on May 4, 1991, for the months of May, June, July and August, in accordance with the Child Support Guidelines and pursuant to

Section 15; (ii) Lump sum and periodic spousal support for the Respondent, retroactive to the date of separation, in accordance with the Spousal Support Advisory Guidelines and pursuant to

Section 15; (iii) The Petitioner maintain medical and dental insurance for the Respondent, pursuant to

Section 15.1(4). (

c) under the Marital Property Act : (

i) An equal division of marital assets pursuant to

Section 3; (ii) An equitable division of marital debts pursuant to

Section 9; (iii) An equitable division of non-marital assets pursuant to Sections 6 and 7. (

d) under the Rules of Court ; (

i) the Petitioner pay the costs of these proceedings. [para. 20] [Emphasis in original.] III. The Hearing in the Court Below [ 10 ] The lawyers representing the Arsenaults in the Family Division proceedings requested the collaborative law lawyers produce the files they opened and maintained in the course of negotiating the marriage contract. Mrs. Arsenault requires production in order to mount her challenge to the validity of the marriage contract and Mr. Arsenault requires

production to uphold the contract. The collaborative law lawyers have refused to produce their respective files, arguing the process is confidential in nature and that privilege attaches to the contents of the files as well as the process itself. Both Ms. Noble and Ms. O’Brien refer to the clauses of the Collaborative Law Contract that deal with confidentiality. It is their position that the sole document from the collaborative law process that is subject to production is the marriage contract, as it is a “with prejudice” agreement. [ 11 ] Upon receiving this response from the collaborative law lawyers, Mr.

Arsenault filed a Notice of Motion seeking: […] an order for disclosure mandating the collaborative law lawyers, Brenda Noble and Mary-Eileen Flanagan [now O’Brien], involved in the negotiation and preparation of the marriage contract to list the contents of their files and to disclose the information relevant to the issues in the divorce proceedings in their possession and knowledge upon such conditions and terms that the Court deems just and appropriate; Mrs. Arsenault sought similar relief in her responding document. [ 12 ] The motion judge took a broad view of the issues. She summarized them as follows: (

a) What is the nature of the privilege inherent in the Collaborative Law process? (

b) Does the claim for disclosure fall within the recognized exceptions to non-disclosure for privilege? [para. 24] [ 13 ] As an aside, Mrs. Arsenault has filed a Notice of Action with Statement of Claim attached, claiming, among other things, both collaborative law lawyers were negligent in the preparation of the marriage contract that resulted from the collaborative law process. Specifically, she claims that a critical provision, paragraph 10(c), was omitted from the contract. It is her contention that paragraph 10(

c) was designed to flesh out her entitlement to part of the business assets. The collaborative law lawyers take a benign view of that omission, describing it as a “typo”, and dispute the allegation of negligence. The fact is that the marriage contract refers explicitly to paragraph 10(c), and that paragraph is nowhere to be found in the marriage contract. IV.

The Decision under Appeal [ 14 ] On August 14, 2013, the motion judge determined that class privilege applied to the collaborative family law process, but that all documents compellable pursuant to the Marital Property Act, S.N.B. 2012, c. 107 , the Divorce Act , R.S.C. 1985, c. 3 (2nd Supp.), the Federal Child Support Guidelines and the Rules of Court , as well as documents produced to verify the financial information, were subject to disclosure and production. The formal order in relation to Ms. O’Brien reads as follows: […] it is ordered that: 1.

The Collaborative Law lawyer, Mary-Eileen O’Brien, make the following disclosure:

a) within 20 days of these reasons, Mary-Eileen O’Brien, shall provide to her former client [Lise Arsenault], a list of the financial documents of either party in her possession, that consist of documents required by sections 15 and 21 of the Federal Child Support Guidelines, Rules 72, 73 and 74 of the Rules of Court , the Divorce Act and the Marital Property Act ;

b) u pon a written request from [Lise Arsenault], Mary-Eileen O’Brien shall provide to [Lise Arsenault] at the latter’s cost, copies of all documents on the list prepared in accordance with paragraph 1(

b) hereinabove; and

2. The Collaborative Law lawyer, Mary-Eileen O’Brien, pay the sum of $1,200.00 in costs to her former client, [Lise Arsenault]; the costs to be all-inclusive of HST and disbursements. An identical formal order has been entered in respect of Ms. Noble’s obligations to her former client, Mr. Arsenault. [ 15 ] As noted in my introductory remarks, the Court upheld this order because, as drafted, it did not infringe the contested privilege asserted by the appellants.

However, and as mentioned, the reasons for decision by the motion judge feature obiter dicta with which I cannot agree and which may prove problematic for the respondents going forward. I deal with this topic under “Analysis”. V. Grounds of Appeal [ 16 ] Ms. Noble and Ms. O’Brien submit the motion judge erred in law in the following respects:

(1) In finding that the files were not protected from disclosure by a collaborative law, mediation or other privilege.

(2) In finding that the files were not protected from disclosure by contractual agreement. (3) […] by finding that an exception to the [settlement] privilege applied without requiring that [Mr. and Mrs. Arsenault] demonstrate that lifting of the privilege was necessary.

(4) In finding that: (

i) Noble and O’Brien were subject to legislative disclosure obligations that apply only to parties involved in a marital dispute; and (ii) applying disclosure obligations based upon the Marital Property Act where those obligations were in conflict with a domestic contract, contrary to s. 42 of that Act.

(5) By finding that: (

i) neither Mr. nor Mrs. Arsenault had a list of the financial documents exchanged through the collaborative law process, nor could they outline the nature of the financial documents exchanged through the collaborative law process; and (ii) there were no other means of obtaining an accurate reproduction of the relevant financial documents. [ 17 ] The matter of the impugned order’s under-inclusiveness was discussed at the hearing. However, neither Mr. Arsenault nor Mrs. Arsenault has filed a Notice of Cross-Appeal. Accordingly, strictly speaking, we need not determine whether the scope of the order is inadequate.

VI. Standard of Review [ 18 ] The parties agree the issues raised by grounds of appeal (1), (2), (3) and (4) involve questions of law, for which the standard of review is correctness, while the issues raised in ground (5) involve questions of fact for which the standard of review is palpable and overriding error: Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235 ; H.L. v. Canada (Attorney

General), 2005 SCC 25 , [2005] 1 S.C.R. 401 ; LeBlanc v. Fundy Drywall Ltd. and Allain , 2014 NBCA 2 , 414 N.B.R. (2d) 339 , at para. 12 ; Baniuk v. Filliter , 2011 NBCA 110 , 381 N.B.R. (2d) 352 , at para. 25 . Ground (4) was not pressed at the hearing and for good reason: it is entirely without merit. I will say no more on that point. VII. Analysis A. Collaborative law: General Observations and a word or two of caution [ 19 ] The collaborative family law (CFL) process has gained popularity in Canada in recent decades because it purports to take a holistic, non-confrontational approach to separation and divorce.

CFL is intended to be a conflict resolution process through which clients and their lawyers meet privately and attempt to reach a settlement through cooperation and dialogue. Wanda Wiegers and Michaela Keet, authors of “Collaborative Family Law and Gender Inequalities: Balancing Risks and Opportunities” (2008) 46 Osgoode Hall L.J. 733, succinctly describe the Collaborative Law (CL) process: In this article, we examine whether and how the distinctive features of CL affect the impact and salience of gender inequalities in the negotiation of family law disputes.

First developed by lawyers in the United States, the emergence of CL has been described as a “paradigm shift” in legal practice. One of the key distinguishing features of CL is the role lawyers play in the settlement process. CL seeks to realize the benefits of client participation and interest-based negotiation through the active involvement of lawyers as both facilitators and advocates.

Unlike in traditional negotiation or litigation, CL lawyers commit to a set of transparent values that emphasizes the importance of the emotional and participatory needs of their clients, the possibility of creative outcomes, and the interdependence of the parties. In another departure from most settlement processes, CL requires that both lawyers and clients work together in open fourway sessions toward the resolution of their dispute. The CL process is also typically structured according to rules of engagement and disengagement that are set out in agreements entered into by both clients and their lawyers.

The content of these agreements varies between provinces and/or regions, but generally these agreements require open disclosure of all material information within the four-way session and demand that lawyers cease representing their clients if the process fails to generate a settlement.

To date, the CL process, in both Canada and the United States, has been restricted largely to the family law area. [p. 735] [ 20 ] Many litigants have chosen CFL over standard litigation because of its emphasis on client participation and building consensus, as opposed to the adversarial system found by many to be antagonistic and alienating: Cristin Schmitz, “Collaborative Lawyers Must Observe Same Standard as Family Law Litigators: Alta. CA” (2011) 30 The Lawyers Weekly 38 (QL).

The parties agree to negotiate in “four-way” meetings (meetings comprised of both parties and their lawyers) in which all parties are expected to participate actively. In CFL, lawyers do not litigate the dispute; they are supposed to help shape and guide the process. Clients are required to make important decisions regarding their settlement instead of relying on their lawyer to represent their interests. Parties generally enter into CFL by signing a Participation Agreement or Collaborative Law Contract, committing to forego litigation and follow the CFL process.

The process ends abruptly if either party sues or threatens to sue, and neither lawyer may be retained for litigation: Donalee Moulton, “Collaborative Family Law and Mediation are Similar but Different” (2002) 22 The Lawyers Weekly 5 (QL). Under CFL theory, “CL creates a metaphorical ‘container’ around the lawyers and clients to help focus on negotiation.

CL creates this container through a mutual withdrawal agreement that disqualifies both lawyers from continuing to represent their clients if either party chooses to discontinue with CL and proceed in litigation”: John Lande, “Possibilities for Collaborative Law: Ethics and Practice of Lawyer Disqualification and Process Control in a New Model of Lawyering” (2003) 64 Ohio St.

L.J. 1315 at 1322. [ 21 ] The lawyer’s role in this process involves facilitating dialogue, seeking mutually beneficial settlement, and information gathering, which can require parties to disclose various types of information (e.g. financial) or hire financial or psychological specialists: Ann Osborne, “The Shift Required of the Family Lawyer is from Zealous Representation to Problem Solving, Educating, Role Modeling and Facilitating” (2005) 24 The Lawyers Weekly 34 (QL). [ 22 ] However, though CFL lawyers are committed to coming to an agreement that benefits both parties they are, unlike mediators, not neutral actors in the process and have a fundamental responsibility to provide legal counsel to their client throughout the process.

CFL lawyers must participate in the process and advise their clients to the best of their abilities while striving to maintain an atmosphere of cooperation and integrity that fosters a mutually beneficial solution for both parties: Webb v. Birkett , 2011 ABCA 13 , [2011] A.J. No. 54 (QL) . [ 23 ] The CFL practice varies among jurisdictions but the broad parameters of the process are usually set by participation agreements, which are entered into by both clients and lawyers before the process begins.

[ 24 ] Despite CFL‘s numerous advocates, many questions persist about its compatibility with current codes of professional conduct. Questions arise as to whether CL is consistent with the duty of loyalty, the duty of candour and truthfulness to others, the compatibility of the disqualification provision and fears over potential breaches of the duty of confidentiality. CL faces challenges with these ethical questions because general rules of ethics governing traditional practice were drafted without CL in mind and may be at odds with the new CL process: Christopher M.

Fairman, “A Proposed Model Rule for Collaborative Law” (2005) 21:1 Ohio St. L. Disp. Resol. 73 at 84. [ 25 ] Another issue that has arisen with the increase in use of CFL is the potential of gender inequalities during the CFL process. In “Collaborative Family Law and Gender Inequalities: Balancing Risks and Opportunities”, the authors opine: Thus, while the CL structure may encourage more open and transparent communication between the parties, it can also disadvantage parties in unequal or abusive relationships.

An undue emphasis on the four-way model as a primary mode of negotiation can restrict access to the verification tools of the discovery process, and restrict the advice and independent support for vulnerable clients. Where an abusive party bargains in bad faith or does not fully disclose, the DP [disqualification provision] will operate to penalize the innocent spouse through the loss of his or her counsel [p. 763]. [ 26 ] The authors also discuss whether the disqualification provisions (DP) found in CFL agreements are ethical: The DP is the key distinguishing feature in CL, and many lawyers view it as essential.

Most CL agreements require the parties not to threaten or commence court action during the process and to compromise if necessary to reach a settlement. The DP further provides that contracting lawyers are disqualified from representing their clients in any contested court proceeding involving the parties.

This clause is broad enough to be triggered by a number of events leading to court action, including the failure to reach an agreement; the need for a restraining order to protect a client; the reliance on formal discovery methods in order to obtain full disclosure; or the need for an order to prohibit the disposition of family property, to compel enforcement after reaching a settlement, or to vary the terms of the initial agreement.

Under the Saskatchewan Contract, CL lawyers are also bound not to release any portion of their file or discuss any aspect of the case with a new lawyer, unless both clients jointly agree in writing. In most agreements, related provisions prevent the work or testimony of any experts or collaborative professionals, such as divorce coaches or child or financial specialists, from being used or subpoenaed in any court action without the written consent of both parties. Most negotiation models presume and rely on access to litigation to both frame and measure progress through the negotiation.

In mediation, the option to terminate at any point is used as security for genuine and voluntary participation and as a defensive “out” for those who experience the process as coercive. While all costly processes likely involve some element of entrapment over time, the DP in CL deliberately increases the potential level of entrapment in an effort to raise the stakes that both lawyers and clients have in the process. The underlying behavioural assumption is that increasing the costs of defection will reduce the temptation to become adversarial or to otherwise take advantage of the other side.

The CL model encourages early settlement by removing uncertainty over the durability and strength of the parties’ commitment to cooperation that often accompanies collaborative negotiation. There is significant academic controversy in the United States as to whether the DP is consistent with ethical rules of professional conduct. Nine state ethics committees have considered collaborative agreements in relation to their professional codes of conduct and all but one have upheld their use. Three states have passed statutes authorizing the use of CL.

Although DPs might be seen as analogous to agreements allowing for the withdrawal of one’s lawyer—and which are enforceable in Canada—there is a key difference in that the loss of one’s lawyer under the DP can be triggered by the conduct of either party, and not only the lawyer’s own client. Some writers have argued that parties might be better served by a different process, especially where the parties’ economic resources and the merits of their legal positions differ significantly.

An alternative process is Co-operative Law, which includes a Cooperative Agreement that incorporates the co-operative norms of CL but excludes the DP. According to Hilary Linton, in circumstances of financial and legal inequality, the DP will unfairly compromise the power of the party with the superior legal claim and deny a legitimate source of leverage. Although the DP is gender neutral in form, it is likely to have a disparate impact on female clients and place them at greater risk of relative disadvantage.

Since women are most often the claimants in family disputes, legal entitlements are more apt to operate as a source of power for them. Upon separation, it is women who more often lack access to an adequate income stream or marital assets or who may have superior claims to custody through their disproportionate role as primary caregivers. To the extent that the DP raises the financial and emotional costs of litigation, it can increase the pressure to accept agreements that meet neither womens’ identified interests nor their legal entitlements. [pp. 763-766]

[ 27 ] It bears noting that in the United States , the Uniform Collaborative Law Act was adopted in 2009 by the Uniform Law Commission, and thereby became available to the individual States to enact as law. Renamed the Uniform Collaborative Law Rules and Act in 2010, the Rules/Act regulates the use of collaborative law and standardizes the most important features of the Collaborative Law Process . As of June 2013, the Uniform Collaborative Law Act was enacted into law in eight states and the District of Columbia.

The Overview to the Act provides a comprehensive and reliable history of the emergence of collaborative law in the United States. The Uniform Law Commission describes the purpose of the Act : This committee has drafted

an act on collaborative law, a new kind of alternative dispute resolution framework used in many states today, particularly in a family law context, i.e., divorce, custody, and support proceedings. The core idea is that lawyers (and parties) to a dispute agree in advance that the lawyers will withdraw if the dispute goes to trial.

In the spring of 2010, revisions to this Act were approved that, inter alia, provide the ability for a state to adopt the provisions of the Act either as a court rule or legislation, and that provide the option to limit the scope of the Act to family law matters or to have the Act applicable to all types of disputes. (Uniform Law Commission, Committees, Collaborative Law Act, online: Uniform Law Commission <http://www.uniformlaws.org>.) [ 28 ] In “Collaborative Practice in the Canadian Landscape” (2011) 49:2 Fam. Ct.

Rev. 221, Nancy Cameron states: Unlike the experience in the United States, no provinces have enacted collaborative statutes. Likewise, neither law societies nor bar associations have expressed the view that there may be an ethical problem with the underlying requirements of the disqualification agreement, or any conflict arising out of the fact that both lawyers and both clients sign the participation agreement. It is common practice in Canadian provinces that couples enter into the collaborative process prior to commencing any court proceedings.

Since the timing for the issuance of a divorce in Canada begins running once the parties are living separate and apart, there is no need to file an order to commence “running the clock” for purposes of the final issuing of a divorce. The usual practice in Canada is to commence proceedings at the completion of the collaborative process for an order for divorce. Because it is unnecessary to create a statute to limit otherwise mandatory court scheduling intervention, are there other reasons that a collaborative statute may be helpful or useful in Canada?

The creation of a collaborative law statute may in itself raise the profile of collaborative practice and increase public knowledge about this process choice. A collaborative statute could also be designed to protect confidentiality within the collaborative process by creating privilege for communications within formal collaborative practice negotiations and by statutorily protecting professionals (including collaborative interdisciplinary professionals) from subpoena if the collaborative process breaks down.

Also, a collaborative statute could statutorily enshrine the disqualification clause, disqualifying collaborative professionals from acting for collaborative clients if litigation ensues. […] Aside from the contractual remedy, a lawyer’s reputation may be the strongest motivator to dissuade lawyers from breaching the disqualification agreement. As lawyers, we all understand that our best resource is our reputation. Any lawyer who fails to abide by their contractual obligation under the participation agreement risks her reputation as a trusted collaborative colleague.

The interpersonal professional relationships among collaborative practitioners are a profoundly important aspect of client service. In order to build and strengthen these relationships, professional practice groups are a common feature of collaborative practice. These practice groups strengthen the working relationships in collaborative teams. For all collaborative practitioners, being able to trust one’s professional colleagues is a central component of our work. Like all relationships of trust, this is built over time, and is strengthened by an agreement on shared values.

For any professional to disregard a core value of collaborative practice would likely irreparably affect that professional’s relationship with other collaborative practitioners. In the last decade, the landscape of dispute resolution in Canada has changed dramatically. Part of the impetus for change has been clients not only desiring but demanding non-litigious approaches to resolving family disputes. Yet without practitioners willing to completely rethink dispute resolutions systems, retrain, and build new skills, this cannot be offered to clients.

Peace building is a value that helps inform the work of this type of systems change. Holding this value allows us to frame the question more broadly than: “Should Canada have a collaborative statute?” If we think about statutory change, what can we do within our jurisdiction to support fundamental statutory change? How do we effectively advocate for change to existing statutes that encourage consensual dispute resolution process; that support families in resolving disputes instead of assuming families will be in a courtroom?

How do we influence statutory change so that statutes provide process options that support healthy post-divorce transitions for children and for adults? [pp. 224 - 226]

[29] Against this backdrop, it appears that Canadian CFL practitioners are relying on local rules toassist them in their practice. A review of CFL in other provinces indicates that some provincial Law Societies are attempting toincorporate CFL into their Codes of Professional Conduct and family law legislation.

This does not appear to be the case in NewBrunswick, a situation that should change only after careful consideration of the pros and cons of the process having regard to the bestinterests of the clients. [30] In sum, in this province, the process of collaborative law is not defined in the Code ofProfessional Conduct for lawyers, the Rules of Court or any other legislation. Moreover, there is no standard contract for participants in acollaborative law process. The rights and obligations of the participants stand to be determined on the basis of the legally validcontractual arrangements they have reached. B.

Rules of Court [31] Regrettably, the objective of the underlying motion has been a moving target with little concernfor the Rules of Court. Mr.

Arsenault’s current lawyer requested in the motion dated April 10, 2012: An Order for disclosure mandating the Collaborative Law lawyers, Brenda Noble and Mary-Eileen Flanagan, involved in the negotiationand preparation of the Marriage Contract to list the contents of their files and to disclose the information relevant to the issues in thedivorce proceedings in their possession and knowledge upon such conditions and terms that the Court deems just and appropriate; […] However, no rule of procedure was cited in support of the relief sought, as required by Rule 37.03(b).

In addition, the parties appear tohave equated disclosure with production, two distinct processes under the Rules of Court. Despite the imprecision of the claim for relief,I will proceed on the assumption that the objective was an order for the disclosure (in essence, oral discovery of the appellants) andproduction of all relevant documents in the appellants’ possession, including those brought to the collaborative law process by theparties. [32] Even though this case is a CFL case, the Rules of Court are in play. In W.A. v.

Minister ofFamily and Community Services, 2002 NBCA 100, 254 N.B.R. (2d) 153, Drapeau J.A. (as he then was) explains the importance of theRules in family law cases: Each of those issues can be litigated, justly, inexpensively and expeditiously, if Mr. W.A. resorts to the appropriate process under theRules of Court. In that regard, what was said in Smith v.

Human Rights Commission (N.B.) et al. (1999), (NB CA),217 N.B.R. (2d) 336 (C.A.), at para. 19, bears repeating: [...] Experience has shown that respect for the jurisdictional framework created by the Rules of Court and compliance with its proceduraldictates serve the best interests of justice. Indeed, conformity with the Rules of Court invariably produces a winnowing of the chaff fromthe grain and, in turn, helpful clarity is brought to the questions submitted to the court for resolution. Focused and insightful decisionsinvariably follow.

The end product is better justice for all. [para. 35] [33] After citing this passage, Wooder J., in H.C. v. New Brunswick (Minister of Family andCommunity Services), 2003 NBQB 196, 263 N.B.R. (2d) 106, further noted that: Similar, and equally pointed, directives have repeatedly issued from that same Court. See: Waugh v. Canadian Broadcasting Corp.(2000), (NB CA), 224 N.B.R. (2d) 391; Moreau-Bérubé v. New Brunswick (1999), (NB CA),217 N.B.R. (2d) 230; Norris v. Lloyd's of London (1998), (NB CA), 205 N.B.R. (2d) 29. Motions judges must insist on compliance with the Rules of Court.

This is more than obsessiveness or idleness on their part. Insistenceon compliance with the procedures established by our statutes is no more than an attempt to ensure due process for all parties who comebefore the courts. It avoids the necessity for the guesswork and patchwork which is the inevitable result when courts attempt to deal withpleadings which do not set out with specificity the relief sought or when pleadings fail to identify the grounds or the authority for therelief requested. Procedural compliance avoids hearings by ambush, or at the most benign, surprise.

It ensures that respondents know thecase they must meet and it informs applicants of the reasons for any resistance to the claim. It provides the court with a clear statementof the issues before it and identifies the jurisdictional basis for the proceeding and the order(

s) sought. [paras. 20-21]

[ 34 ] The Rules of Court , when utilized effectively, are conducive to achieving justice. It is with this in mind that I turn to the import of the use of the discovery-related Rules of Court in family law cases. The appellants contend the order compelling them to list documents is essentially an order providing for their oral discovery under Rule 32.10, while the order directing them to produce documents is an order under Rule 31.11.

Neither Rule 32.10 nor Rule 31.11 is referenced in the Notice of Motion. [ 35 ] Rule 31.11(3) contains the prerequisite that before making an order for production against a non-party , the court must be satisfied, not only that the document in question relates to a material issue in the action, but, as well, that it would be inequitable to require the applicant to proceed to trial without its discovery. Rule 31.11 reads: 31.11 Documents in the Possession of a Person Not a Party

(1) Where a document is in the possession or control of a person not a party to the action, any party may apply to the court, on notice to such person and to every other party, for an order for the production for inspection of such document if it is not privileged. […]

(3) No order shall be made under this subrule for the production for inspection of a document unless the court is satisfied that the document relates to a material issue in the action and that it would be inequitable to require the applicant to proceed to trial without having discovery of that document.

(4) On an application under this subrule, where (

a) privilege is claimed for a document, or (

b) the court, with respect to a document, is in doubt as to (

i) its relevance, or (ii) the necessity for its discovery, the court may inspect the document. 31.11 Documents en possession d’un tiers

(1) Lorsqu’un document est en la possession ou sous le contrôle d’une personne non

partie à l’action, toute

partie peut, sur préavis à ce tiers et à chaque autre partie, demander à la cour d’ordonner la production pour examen de tout document non privilégié. […]

(3) La cour ne doit ordonner la production pour examen d’un document que si elle est assurée qu’il a trait à une question déterminante dans cette action et qu’il serait injuste d’exiger que le requérant entame le procès sans que le document ne lui ait été communiqué au préalable.

(4) Lors d’une requête présentée en application du présent article, dans les cas où

a) un privilège serait revendiqué sur un document ou

b) la cour douterait (

i) de la pertinence d’un document ou (ii) de la nécessité de communiquer un document, la cour peut examiner le document. [ 36 ] As for Rule 32.10, it provides a mechanism by which information may be obtained from non- parties . Before an order for discovery may issue under that Rule, the court must first be satisfied the moving party cannot obtain the

information from individuals he or she is entitled to examine and it would be unfair to require the moving party to proceed to a hearing without the benefit of discovery of the non-party. Rule 32.10 provides: 32.10 Discovery Where Leave Is Required

(1) The court may grant leave, on such terms respecting costs and other matters as are just, to examine for discovery any person who there is reason to believe has information relevant to a material issue in the action.

(2) An order under paragraph (1) shall not be made unless the court is satisfied that (

a) the party making the motion has been unable to obtain the information from other persons whom he is entitled to examine for discovery, or from the person he seeks to examine; (

b) it would be unfair to require the party making the motion to proceed to trial without having the opportunity of examining the person; and (

c) the examination will not (

i) unduly delay the commencement of the trial of the action, (ii) entail unreasonable expense for other parties, or (iii) result in unfairness to the person whom the party making the motion seeks to examine. 32.10 Interrogatoire sur permission requise

(1) La Cour peut accorder, aux conditions qu’elle estime justes relativement aux dépens et à d’autres matières, la permission d’interroger au préalable toute personne si la cour a des raisons de croire qu’elle possède des renseignements pertinents sur une question déterminante du litige.

(2) La cour ne rend une ordonnance en application du paragraphe (1) que si elle est convaincue

a) que l’auteur de la motion n’a pas été en mesure d’obtenir les renseignements des autres personnes qu’il a le droit d’interroger au préalable, ou de la personne qu’il cherche à interroger;

b) qu’il serait injuste d’exiger que le procès suive son cours sans que l’auteur de la motion ait eu la possibilité d’interroger cette personne; et

c) que l’interrogatoire n’aura pas pour effet (

i) de retarder indûment le début du procès, (ii) d’entraîner des dépenses exagérées pour les autres parties, ou (iii) de causer une injustice à la personne que l’auteur de la motion cherche à interroger. [ 37 ] The appellants submit the order under appeal cannot stand because there is nothing in the record to establish that it would be inequitable or unfair to require the respondents to proceed without the benefit of the targeted disclosure of information and production of documents.

They underscore the respondents have yet to exchange Rules -compliant affidavits of documents or to submit to an examination for discovery. They suggest it is likely that following the usual inter-party discovery process, the need for the disclosure and production sought in the Notice of Motion will no longer exist. There is much to be said in support of that view.

However, here, the motion judge made strong findings of fact on point: Both Mr. and Mrs. [Arsenault] seek disclosure of the financial information that is contained in the Collaborative Family Law files in order to deal directly with the stated grounds of misrepresentation arising from the alleged non-disclosure of financial information. They wish to proceed to discoveries and finalize the litigation relating to the validity of their contract. Neither Mr. [Arsenault] nor Mrs. [Arsenault] has possession of the Collaborative Family Law files maintained by solicitors Noble and O’Brien.

They do not have a detailed list of the financial documents relevant to matrimonial matters that were exchanged in the course of the negotiations. They are unable to clearly outline in any reliable fashion the true nature of the financial disclosure that was produced some seven years ago when the marriage contact was negotiated.

[…] Financial disclosure in this context is not a matter of recollection of the paperwork that was exchanged in 2006 nor is it a guessing game between two competing versions or a case of hide and seek. It is a matter of producing what was in fact brought to the table in 2006 in circumstances where there is no other means of obtaining an accurate reproduction of the relevant financial documents. [paras 39 and 52] [ 38 ] Those findings of fact can only be set aside in the event of palpable and overriding error.

I find no such error, and conclude the preconditions to an order for production under Rule 31.11 and an order under Rule 32.10 were satisfied. There is therefore no merit to ground of appeal (5). That brings me to the principal basis upon which the appellants resisted the motion in first instance: privilege, which is the issue targeted by grounds of appeal (1), (2) and (3). C. Privileg e [ 39 ] It is important to note the uniqueness of this case.

The appellants are asserting a privilege against the interests of their former clients, each of whom has unequivocally waived any and all privileges that apply, or could arguably apply, to information and documentation relating to the collaborative law process that culminated with the contested marriage contract. Each client has instructed his/her former collaborative law lawyer to disclose that information and to produce those documents without delay.

To be clear, the claim for privilege asserted in these proceedings is one that would allow collaborative law lawyers to disregard instructions from their clients and to deny them disclosure of relevant information and production of relevant documents in their former clients’ files. It should go without saying that this claim of privilege to the benefit of the lawyers is prima facie objectionable. [ 40 ] Ms. Noble and Ms. O’Brien claim they, along with Mr. and Mrs.

Arsenault, contracted for the benefit of protection of confidentiality and privilege over the communications that arose during their settlement discussions in the collaborative law process. Ms.

O’Brien’s written submission states: The parties, in entering the collaborative law process, agreed to be bound by strict confidentiality and unusual protections against disclosure of anything occurring during the collaborative law process in consideration for the significant advantages obtained through the collaborative law process, such as an environment in which full disclosure without prejudice to the interests of the parties could be made. [Denis Arsenault] and [Lise Arsenault] took full advantage of this process to arrive at a settlement in the form of a Marriage Contract.

Their agreement with their solicitors to maintain strict confidentiality should not be set aside in the circumstances of this case. [para. 38] Ms. Noble and Ms. O’Brien rely upon Clause 10.4 of the Collaborative Law Contract to support their claim of complete privilege over the collaborative law files. Clause 10.4 states: If either Lise or Denis go to court they may use or refer to “with prejudice” agreements they make during the Collaborative Law Process. Lise & Denis cannot use or refer to any other minutes or discussions from the Collaborative Law Process if Lise or Denis go to Court.

The judge found, correctly in my view, that the sought-after information and documents were not captured by the phrase “minutes or discussions from the Collaborative Law Process” found in Clause 10.4. I would add that the clause operates to the benefit of the clients, not the lawyers. No other clause of the Collaborative Law Contract accords confidentiality rights to the lawyers, which they might assert against the wishes of the clients. [ 41 ] At any rate, Ms. Noble and Ms. O’Brien submit collaborative law files are subject to a blanket privilege, which they term “mediator’s privilege”.

They suggest this privilege applies to documents brought to, and communications made at, mediation. They contend it belongs to both the mediator and the parties, and may not be waived unilaterally by the parties to the underlying dispute. They argue this privilege is distinct from “settlement privilege”, which applies to “without prejudice” communications and belongs to, and may be waived by, the parties. Finally, they assert the need for protection of confidentiality is even stronger in the case of collaborative law lawyers than it is for traditional mediators.

This is because collaborative law lawyers might give advice to move the process toward settlement and there is value in preventing future litigation counsel from learning what transpired in collaborative law sessions. [ 42 ] The motion judge discusses the applicability of privilege at length in the decision. At paragraph 35 she states:

I therefore find that the class privilege (blanket privilege) applies to the Collaborative Family law process. The process engages acombination of solicitor-client privilege and settlement privilege, resolution of legal issues being the objective.

Accordingly, thecommunications and settlement discussions arising through the Collaborative Law process are prima facie privileged and inadmissible asthe public interest in encouraging settlements outweighs the interest of disclosure. [para. 35] [Emphasis added.] Later, she asserts that “all communications, discussions, proposals whether written or oral, and documents created during thecollaborative law process remain privileged, in the context of this current motion, except for the signed marriage contract itself” (para.53). [43] Regardless, the motion judge goes on to examine whether the claim for disclosure andproduction falls into the recognized exceptions to settlement privilege: Consistently, the jurisprudence and legal texts have recognized the existence of limited exceptions to the prima facie privilege that arisesin settlement negotiations.

When exception is claimed, the party who wishes to obtain disclosure bears the burden of establishing it. Incases where the Court admits the exception, the disclosure will by necessity, be qualified by narrow and well defined parameters as itremains in the public interest to promote settlement and avoid injury to the confidentiality and privilege that attaches to settlements.[para. 36] She relies on Sable Offshore Energy Inc. vs.

Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623, for the proposition thatclass privilege attaches to settlement negotiations and sets out the necessary exceptions to disclosure that can arise: […] [12] Settlement privilege promotes settlements. As the weight of the jurisprudence confirms, it is a class privilege. As with otherclass privileges, while there is a prima facie presumption of inadmissibility, exceptions will be found “when the justice of the caserequires it” (Rush & Tompkins Ltd. v.

Greater London Council, [1988] 3 All E.R. 737 (H.L.), at p. 740). [...] [19] There are, inevitably, exceptions to the privilege. To come within those exceptions, a defendant must show that, on balance, “acompeting public interest outweighs the public interest in encouraging settlement” (Dos Santos Estate v. Sun Life Assurance Co. ofCanada, 2005 BCCA 4, 207 B.C.A.C. 54, at para. 20). These countervailing interests have been found to include allegations ofmisrepresentation, fraud or undue influence (Unilever plc v. Procter & Gamble Co., [2001] 1 All E.R. 783 (C.A.), Underwood v.

Cox(1912), (ON SCDC), 26 O.L.R. 303), and preventing a plaintiff from being overcompensated (Dos Santos, [2005]B.C.J. No. 5). In this case, the issue in the main action revolves around an attack on the validity of the marriage contract on a number of frontsincluding “allegations of misrepresentation”. Mrs. [Arsenault] raises allegations of incomplete and or inadequate financial disclosurefrom Mr. [Arsenault] in the course of the Collaborative Family Law process.

She argues that this impacts on the resolution of the maritalproperty and non-marital property division and the issue of spousal support that the marriage contract pre-determined. [paras. 37-38] [44] The judge goes on to describe the documents being sought as “documents that are compellableat law” (para. 44). She states: When parties are involved in proceedings related to marital and non-marital property claims as well as child and spousal support claims,they are required to produce comprehensive financial disclosure. That duty exists both as a result of the legislative requirements and thejurisprudence.

Specifically, under Rules 72 (Divorce Petition with or without a joinder for relief under the Marital Property Act), Rule 73 (FamilyDivision Proceedings including claims under the Family Services Act) and Rule 74 (Marital Property Act applications), the parties areobligated to produce a Financial Statement (Form 72J) or a Statement of Property and Debts (Form 74A), a Statement of Contribution toProperty (Form 74B) where required, and income information pursuant to the Federal Child Support Guidelines.

The extent ofdisclosure under the Guidelines is of itself very broad depending upon a party's sources of income and/or the nature of any business or

corporate holdings. [paras. 45-46] [ 45 ] The judge explains she could not see how production of the above noted financial documents, which are compellable by law, could be found to be “injurious” to either settlement privilege or solicitor-client privilege. The judge determined that regardless of whether the exception to privilege was met, she would have concluded the financial documents that are compellable at law must be produced.

In the end, she found as follows: I find that the parties are entitled to have access to the mandatory financial documents that were disclosed in 2006 because they were compellable at law. They are also entitled to have access to the documents that were produced as verification of the values of assets, debts and or proof of income. Financial disclosure in this context is not a matter of recollection of the paperwork that was exchanged in 2006 nor is it a guessing game between two competing versions or a case of hide and seek.

It is a matter of producing what was in fact brought to the table in 2006 in circumstances where there is no other means of obtaining an accurate reproduction of the relevant financial documents. However, as stated in the case law, disclosure orders in this context cannot be overly broad. The parameters must be clear and fairly narrow.

Further, in order to protect the public's interest in settlement, it follows that all communications, discussions, proposals whether written or oral, and documents created during the collaborative law process remain privileged, in the context of this current motion, except for the signed marriage contract itself.

However, the documents that are compellable through the normal course of claims made pursuant to the Marital Property Act , the Divorce Act , the Federal Child Support Guidelines and the Rules of Court as well as the documents produced to verify the financial information are subject to disclosure. [paras. 52-53] [ 46 ] With respect, I do not agree with the motion judge’s statement that “all communications, discussions, proposals whether written or oral, and documents created during the collaborative law process remain privileged, in the context of this current motion, except for the signed marriage contract itself”.

In my view, in this province there is no class privilege in the Collaborative Law Process for the benefit of the participating lawyers . In that regard, I will underscore the obvious: (1) this province does not have a long-standing history with collaborative law; (2) there is no provincial statute on point; (3) there is no Rule of Court directly on topic; (4) no provision in the Code of Professional Conduct for lawyers is specifically directed at collaborative law; and (5) no standard contract has been adopted.

Before the existence of a privilege inuring to the lawyers could be judicially considered, a clear provision to that effect would have to be included in the Collaborative Law Contract. Here, the issue of confidentiality is addressed in Clause 10.4 of the Collaborative Law Contract, which is reproduced in paragraph 40 above. That clause, by its very terms, accords rights and obligations to the clients, not their lawyers. It is a clause that was inserted in the Collaborative Law Contract for the benefit of the clients, and no one else.

If confidentiality rights had been accorded to the lawyers by the Collaborative Law Contract and the lawyers had asserted those rights over the objections of their clients, the Court would have had to consider whether the pertinent clause should be struck on public policy grounds. [ 47 ] At the hearing on appeal, counsel for Mr. and Mrs. Arsenault confirmed each of their clients had waived any and all privileges (solicitor/client privilege, settlement privilege, etc.) that could conceivably be argued.

The respondents/clients simply want disclosure of the information and production of the documents that are relevant to their dispute over the validity of the marriage contract. Much was said about privilege in the court below and in our Court, but one must not overlook what exactly was being requested of the collaborative law lawyers: in essence, to produce the documents their clients brought to the table – documents that are the property of the clients and which, pursuant to the Law Society of New Brunswick’s Code of Professional Conduct , must be returned to the clients when requested. VIII.

Conclusion [ 48 ] While I disagreed with some features of the motion judge’s reasons for decision relating to the issue of privilege, like my colleagues, I was satisfied the actual order she granted, which is carefully and narrowly drawn, was beyond reproach. In sum, that is why I joined in dismissing the appeal from the Bench.

I would complete the proceedings by ordering each appellant pay costs of $5,000 to each respondent. [ 49 ] That said, and having regard to the terms of the Collaborative Law Contract between the parties, the state of collaborative law in this province, the respondents’ unqualified waiver of any privilege, whether valid or not, and the solicitor-client relationships in effect at the material times, I am of the view that no privilege stands in the way of the respondents’ discovery of communications, discussions, proposals, whether written or oral, and documents created during the collaborative law process.

______________________________ KATHLEEN A. QUIGG, J.A. WE CONCUR: ___________________________________ J. ERNEST DRAPEAU, CHIEF JUSTICE OF NEW BRUNSWICK __________________________________ ALEXANDRE DESCHÊNES, J.A.