2013 NBCA 17, 2013 NBCA 17

COURT OF APPEAL OF NEW BRUNSWICK 115-12-CA THE BEAVERBROOK ART GALLERY APPELLANT GALERIE D’ART BEAVERBROOK APPELANTE - and - - et - BEAVERBROOK CANADIAN FOUNDATION RESPONDENT BEAVERBROOK CANADIAN FOUNDATION INTIMÉE The Beaverbrook Art Gallery v. Beaverbrook Canadian Foundation, 2013 NBCA 17 Galerie d’art Beaverbrook c.

Beaverbrook Canadian Foundation, 2013 NBCA 17 CORAM: The Honourable Chief Justice Drapeau The Honourable Justice Robertson The Honourable Justice Quigg CORAM : L’honorable juge en chef Drapeau L’honorable juge Robertson L’honorable juge Quigg Appeal from a decision of the Court of Queen's Bench: August 14, 2012 Appel d’une décision de la Cour du Banc de la Reine : Le 14 août 2012 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : Inédite Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: January 24, 2013 Appel entendu : Le 24 janvier 2013 Judgment rendered: February 21, 2013 Jugement rendu : Le 21 février 2013

Reasons for judgment by: The Honourable Chief Justice Drapeau Motifs de jugement : L’honorable juge en chef Drapeau Concurred in by: The Honourable Justice Robertson The Honourable Justice Quigg Souscrivent aux motifs : L’honorable juge Robertson L’honorable juge Quigg Counsel at hearing: For the appellant: David Duncan Young and Leanne M. Murray For the respondent: Rodney J. Gillis, Q.C. Avocats à l’audience : Pour l’appelante: David Duncan Young et Leanne M. Murray Pour l’intimée : Rodney J. Gillis, c.r. THE COURT The appeal is dismissed with costs.

The judgment of the Court was delivered by DRAPEAU, C.J.N.B. [ 1 ] The present appeal brings into play Rules 2.01 and 32.02(2) of the Rules of Court . Rule 2.01 authorizes the court to dispense with compliance with any rule. As Quigg, J.A. observed, on behalf of the majority, in Trifidus Inc. v. Samgo Innovations Inc. , 2011 NBCA 59 , 375 N.B.R. (2d) 141, at para. 38 “[t]he purpose of a dispensation under Rule 2.01 is to prevent an injustice”.

Moreover, the party seeking dispensation under Rule 2.01 bears the burden of establishing its value as a shield against abuse of process and, more generally, injustice (see Trifidus Inc. v. Samgo Innovations Inc ., at para. 37 ).

As for Rule 32.02(2), it may be broken down into the following elements: (1) where a corporation is to be examined for discovery, the examining party may select and examine an officer, director or manager on behalf of the corporation ; (2) however, the corporate party may apply for an order compelling the examining party to examine some other officer, director, manager or employee; and (3) once the examination of an officer, director, manager or employee has taken place, no other officer, director, manager or employee may be examined on behalf of the adverse corporate party, except with leave of the court. [ 2 ] Timothy Aitken, the grandson of William Maxwell Aitken, the first Lord Beaverbrook, was president of the respondent, the Beaverbrook Canadian Foundation, when the appellant, the Beaverbrook Art Gallery, selected him as the person to be examined for discovery on behalf of the Foundation.

However, Timothy Aitken is no longer a Foundation officer or director, having resigned in June of 2012. Nor is he currently a manager or employee of the Foundation. [ 3 ] Rule 32.02(2) is not ambiguous. The person selected to be examined for discovery on behalf of

an adverse corporate party must be one of its officers, directors, or managers both at the time of his or her selection and at the time of theexamination (see Buckley v. Students Union of St. Thomas University Inc. (1991), (NB KB), 120 N.B.R. (2d) 91,[1991] N.B.J. No. 846 (Q.B.) (QL), per Stevenson, J.). The logic of the latter requirement is self-evident: the selected person is to beexamined “on behalf of the corporation” and, as a result, his or her answers are sought with a view to binding the corporation.

Rule32.02(2), like its sister rules of procedure, has the “force and effect of a legislative enactment”: s. 76 of the Judicature Act, R.S.N.B.1973, c. J-2. [4] By the decision under appeal, a judge of the Court of Queen’s Bench ordered the Gallery tochoose someone other than Timothy Aitken to be examined on behalf of the Foundation. In ruling as she did, the motion judgeeffectively declined to override Rule 32.02(2).

She made the order under appeal for the following reasons: In this case, there is evidence that [Aitken], a representative of the Gallery and Chief Justice David Smith met in New York in an effortto settle the dispute. The settlement which they arrived at was rejected by the Foundation and [Aitken] resigned. Counsel for theFoundation says there is a conflict between the Foundation and [Aitken] which makes him an unsuitable person to testify on its behalf. Iagree. The most compelling argument, however, is that ordering [Aitken] to testify will inevitably further prolong this litigation.

It has alreadygone on long enough and at great expense to these two charitable organizations. [paras. 7-8] [Emphasis added.] [5] The Gallery appeals, with leave, arguing the motion judge erred in law in finding there was aconflict between the Foundation and Timothy Aitken, in failing to find that the Foundation had not proven Timothy Aitken’s resignationwas bona fide and in ordering the Gallery choose another suitable candidate to examine for discovery, so as to avoid prolonging thelitigation.

In my assessment, stripped to its essential nature, the Gallery’s argument in the court below could only succeed if an orderissued dispensing with the requirement under Rule 32.02(2) that the person selected be an officer, director or manager at the time of hisor her examination on behalf of the corporation. [6] The general rule is that the party who asserts must prove. The Gallery bore the burden ofestablishing the condition precedent to the application of Rule 2.01, namely that dispensation was necessary to thwart an abuse of processand, more generally, in the interests of justice.

It failed to discharge that burden. [7] Indeed, there is not one iota of evidence that the Foundation and Timothy Aitken orchestratedhis resignation with a view to frustrating or impairing the Gallery’s discovery of the Foundation (see Pullman Power Products of CanadaLtd. v. Noell GmbH et al. (1996), (NB KB), 177 N.B.R. (2d) 305, [1996] N.B.J. No. 213 (Q.B.) (QL), per Deschênes,J., as he then was, at paras. 9 and 11). Nor does the record suggest Timothy Aitken’s examination on behalf of the Foundation isessential to the prosecution of the Gallery’s case.

The motion judge could conclude that Timothy Aitken and the Foundation heldconflicting views regarding the preferable outcome for the litigation and that his court-ordered examination on behalf of the Foundationrisked delaying this already slow moving litigation. [8] The standard of review applicable to appeals from discretionary orders is set out inBeaverbrook Canadian Foundation v. Beaverbrook Art Gallery, 2006 NBCA 75, 302 N.B.R. (2d) 161: […] The impugned Order is quintessentially the product of an exercise of judicial discretion.

Like any other discretionary judicialdecision, it may be interfered with on appeal only if it is founded upon an error of law, an error in the application of the governingprinciples or a palpable and overriding error in the assessment of the evidence (see British Columbia (Minister of Forests) v. OkanoganIndian Band, [2003] 3 S.C.R. 371, 2003 SCC 71 at para. 43) or if it is unreasonable, in the sense that nothing in the record can justify it(see The Honourable R.P.

Kerans, Standards of Review Employed by Appellate Courts (Edmonton: Juriliber Limited, 1994) at pp. 36-37and Secretary of State for Education and Science v. Tameside Metropolitan Borough Council, [1977] A.C. 1014 (H.L.) Lord Diplock atp. 1064). [para. 4] Applying that standard, I would uphold the motion judge’s decision and dismiss the appeal with costs which I would set at $2,500. Itfollows that the Court need not pass upon the admissibility of evidence of a post-decision occurrence proffered by the Foundation for thepurpose of showing Timothy Aitken’s resignation was indeed bona fide.

[ 9 ] A final word. It is often said that justice delayed is justice denied. This litigation needs judicial oversight in the Court of Queen’s Bench if the ends of justice are to be pursued in timely fashion. ____________________________________ J. ERNEST DRAPEAU, CHIEF JUSTICE OF NEW BRUNSWICK WE CONCUR: _____________________________________ J.T. ROBERTSON, J.A. ______________________________________ KATHLEEN A. QUIGG, J.A.