Professional Institute of the Public Service of Canada, ( Plaintiff ) - v. -, 2023 NBKB 016

CITATION: 2023 NBKB 016 DATE: February 9, 2023 Docket: FC-349-2015 IN THE COURT OF KING'S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF FREDERICTON BETWEEN: Professional Institute of the Public Service of Canada, ( Plaintiff ) - and - Province of New Brunswick, ( Defendant ) DECISION BEFORE: Justice E. Thomas Christie AT: Fredericton, New Brunswick DATE OF ARGUMENTS: January 10, 2023 DATE OF DECISION: February 6, 2023 APPEARANCES: Fiona Campbell, and Ben Piper, for the Plaintiff Josie Marks, and Danielle Harding, for the Defendant Christie, J.

INTRODUCTION [ 1 ] In this Motion, the Plaintiff (and Applicant on Motion), the Professional Institute of the Public Service of Canada (PIPSC) seeks, amongst other relief, to prevent the Defendant, the Province of New Brunswick (PNB) from having available for use at the trial of the underlying action, two pieces of correspondence between representatives of the parties. Both pieces of correspondence were listed in

Schedule ‘A’ of PNB’s affidavit of documents (schedule ‘A’ being documents that relate to a matter in issue, are in the possession or control of the party, and for which the party makes no claim of privilege ( R . 31.03(4)(a)). [ 2 ] PIPSC did not list the correspondence in its affidavit of documents at all. Specifically, it did not list the documents in its

schedule “B”, (containing those documents in the party’s possession or control, that relate to a matter in issue, and over which the party asserts a claim of privilege ( R . 31.03(4)(b)). I note in passing that no party argued that the correspondence did not relate to ‘a matter in issue’. [ 3 ] The present Motion specifically identifies and relies on Rule 36.06(

b) which provides as follows: 36.06 Where the court is satisfied that a document has been omitted from or adequately described in an affidavit of Documents, or the claim of privilege may have been improperly made , therein, the court may

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b) order delivery of a further and better Affidavit of Documents, [emphasis added] [ 4 ] I note that neither party, in their affidavit of documents, claimed privilege over the correspondence at issue. Nor was there any argument that the documents had been omitted or were not adequately described. Thus, in my view, Rule 36.06(

b) is of little use as a point to ground the Motion. The Motion goes further and asks the court for: A declaration that the letters dated July 16, 2019, and September 9, 2019, and marked as Bates Nos. PE002249 and PE002250 are subject to privilege; [ 5 ] PIPSC characterizes the privilege it now asserts as a ‘settlement privilege’. [ 6 ] PIPSC represents approximately 390 skilled professional employees working for the Province of New Brunswick. The bargaining and administration of collective agreements between the parties represents its core function.

The collective bargaining relationship is, essentially, an ongoing endeavour. The negotiation of monetary issues can be a central component of bargaining for both parties. This could include matters that touch upon the structure and administration of any pension plans. In February 2016 (Notice of Action filed December 30, 2015), PIPSC filed a Statement of Claim against PNB alleging that,

An Act Respecting Public Service Pensions , SNB 2013, c 44 and ss. 63(2) (

a) and ( a.1 ), of the Public Service Labour Relations Act , RSNB 1973, c P-25 are unconstitutional. [ 7 ] The thrust of the claim was that the legislation prohibited collective bargaining of pension matters and prohibited members of PIPSC from resorting to strike action over pension disputes. The pension legislation at issue changed the structure of the pension plan of the PIPSC members from a defined benefit plan to one that was considered a shared risk plan. PIPSC viewed these changes to the structure of the pension plan to be detrimental to its members and contrary to Charter protected rights.

PIPSC wanted to be in a position to fully bargain pension matters. It took the view that the legislation prevented the parties from doing so. Whether PIPSC is correct or not is not a matter for consideration here. [ 8 ] In its Statement of Defence to the claim, PNB asserted that the legislation does not prevent meaningful collective bargaining of pension issues or prevent the employees right to strike. PNB asserted that it remains open to possibly negotiating a supplemental benefit plan or scheme.

No legislation, it stated, prevents this. [ 9 ] At the risk of oversimplifying the alleged facts underlying the claim, PIPSC argues that the impugned legislation prohibits the bargaining of pension issues and interferes with the right to strike. PNB says it does not. After the filing and service of pleadings, and as the parties were preparing for their next round of bargaining, PIPSC and PNB engaged in a series of correspondence which appears to be an attempt by PIPSC to clarify a willingness to bargain certain pension issues.

Depending on how one views the correspondence, it could be seen as impacting PIPSC’s claim that pension issues could not be bargained. Of course, my comment in this regard should in no way be seen as endorsing or rejecting such a view. Nevertheless, with the action having been commenced and, with preparations for bargaining underway, Mr. Richard Beaulé, Director of National Labour Relations for PIPSC, writes on July 16, 2019, to Mr.

Frédéric Finn, Chief Human Resources Officer for the Province as follows: I am writing to you on behalf of the Professional Institute of Public Service of Canada (The Institute) in advance of the upcoming bargaining for the groups mentioned in the attached appendix. It has been brought to our attention that, in the context of the current pension litigation against the government, the government has acknowledged for the first time that pension benefits can be subject of collective bargaining.

Specifically, the government has stated that as a supplemental plan would not be covered by s. 63(2) of the PSLRA, it could be bargained. The New Brunswick Public Service Pension Plan (the PSSRP), in place since 2014, has had a significant negative impact on the pension benefits our members will now receive at retirement. A few of these consequences include: - losing a guaranteed defined benefit - losing a guaranteed annual COLA - increasing the normal retirement age from 60 to 65 - the switch from a best 5 year average to career average to determine pension income.

We would appreciate if you could confirm that, consistent with the position taken in the context of the pension litigation, the government is willing to engage in meaningful collective bargaining over the pension issues, through a supplemental plan or otherwise, in this upcoming round of bargaining. The Institute's members have been severely prejudiced by the fact that the pension plan was unilaterally amended without our members having the ability to engage in meaningful collective bargaining over those amendments.

In these circumstances, this upcoming round of bargaining, and particularly any bargaining over pension issues would be undertaken without prejudice to the past actions taken by the government under the Act Respecting Public Pensions , SNB 2013, c 44 .

We look forward to hearing from you on this issue on or before July 31 st , so that the Institute can properly prepare its bargaining proposals. [underlined emphasis added] [ 10 ] On September 9, 2019, Mr. Finn replies to Mr. Beaulé as follows: We are in receipt of your correspondence dated July 16, 2019 setting out your request for confirmation of the position of the Province of New Brunswick with respect to the collective bargaining of supplemental pension benefits.

Please note that the government has not wavered in the position taken since Premier Alward's letter of May 27, 2013 and that it considers the matter of a supplemental plan to address issues of specific concern to your bargaining units to be a matter for collective bargaining. Having said that, Treasury Board is not the legal Employer for the New Brunswick Legal Aid Services (LA) group listed in Appendix A to your correspondence and as such cannot negotiate on behalf of that employer nor can we speak on its behalf regarding their position on the pension matters.

With respect to your statements that bargaining would be without prejudice to past actions taken by the government, we must seek the advice of legal counsel before we would be in a position to respond on this issue . As previously noted, the government has been consistent in its position regarding the consideration of a supplemental plan or plans since Premier Alward's letter of May 27, 2013. [emphasis added] [ 11 ] It is these two pieces of correspondence over which PIPSC, through this Motion, now claims settlement privilege, thus preventing their use at trial. [ 12 ] In Sable Offshore Energy Inc. v.

Ameron International Corp. , 2013 SCC 37 , the court identified the purpose of settlement privilege in the following terms at para. 2: The purpose of settlement privilege is to promote settlement. The privilege wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible. [ 13 ] In Nova Scotia Teachers Union v.

Nova Scotia (Attorney General) , 2019 NSSC 175 , at para. 7 , Justice Campbell described the purpose of settlement privilege in the following way: The purpose of settlement privilege is to protect negotiations intended to settle a dispute from being used against a party in the adjudication of that dispute by a third party. [ 14 ] Justice Campbell went further in para. 7 noting, “ The communications sought to be excluded here are not being used in the adjudication of any dispute that they were intended to settle. ” In the matter before him, the Attorney General was facing a challenge to the constitutionality of legislation intended to impose certain terms of a collective agreement between the parties.

However, prior to the commencement of the legal challenge to the legislation, communications between the lead negotiators included reference to the possible future use of legislation as a means to ultimately end any collective bargaining dispute. It was those discussions (as set out in various affidavits in relation to the constitutional challenge) that Nova Scotia wanted to exclude. In other words, at the time the statements were exchanged between negotiators, there was no legal action filed or specifically contemplated.

As Justice Campbell wrote at para. 45, “ But no one was planning to take anyone to court about anything at that point. ” That is unlike the present matter where the action was in existence at the time the correspondence at issue was exchanged – the Notice of Action having been filed on December 30, 2015, with the Statement of Claim following two months later. [ 15 ] In Brandt Tractor LTD. v. Kitchen , 2021 NBCA 54 , at para. 10 , the Court of Appeal confirmed the applicable test for settlement privilege to be the following: 1. A litigious dispute must be in existence or within contemplation: 2.

The communication must be made with the express or implied intention it would not be disclosed to the court in the event negotiations failed; and 3. The purpose of the communication must be to attempt to effect a settlement. [ 16 ] In NSTU , Justice Campbell applies this test noting, at para. 39 that, “ The party asserting the privilege must show those things. ”

The burden is on PIPSC to establish each factor of the test. Before saying more on the applicability of the test in this case, it must be noted that successfully meeting the burden does not, in all cases, lead to a finding prohibiting use at trial. There is an exception. [ 17 ] This exception is based on the recognition that, “ The purpose of a trial is to seek the truth and the extension of privilege is an impediment to that. ” ( NSTU , para. 9).

In Sable , at para. 12, the court noted that, “ As with other class privileges, while there is a prima facie presumption of inadmissibility, exceptions will be found “when the justice of the case requires it”” . Therefore, even if PIPSC is successful in meeting the three-pronged test, that may not be the final answer. [ 18 ] On the first step of the test, the moving party must satisfy the court that a litigious dispute exists or is within contemplation.

PNB argued that the correspondence at issue was exchanged between the parties’ labour relations representatives as part of the process of setting the stage for collective bargaining. The correspondence, it argues, were not part of an exchange dealing with the litigation. As such, PNB argues that PIPSC cannot meet the first test.

Paragraph 35 of PNB’s brief, makes reference to Peter Sankoff’s online text, The Law of Witnesses and Evidence in Canada , (Thomson Reuters Proview), specifically § 17:52: In order to be privileged, a communication must be related to a dispute that is in existence between the parties, though the rule does not require proof that legal proceedings had actually commenced when the statement was made, so long as litigation was contemplated. [ 19 ] In my view, the first step has been met.

The existence of the present litigation, relating as it does in part to any limits there may have been on bargaining certain pension issues, was specifically noted in Mr. Beaulé’s July 16 th letter wherein he wrote, “ It has been brought to our attention that, in the context of the current pension litigation against the government .. . ”. As noted in the Sankoff article, the correspondence must relate to the existing dispute - a point made all the more compelling by the decision of PNB to include the correspondence in its

schedule ‘A’ of the Affidavit of Documents containing, as it must, a list of documents that relate to the litigation . [ 20 ] The second factor requires PIPSC to satisfy the court that the correspondence was made with an express or implied intention that it would not be disclosed to the court. There is no expressed intention in the letters to that effect. The September 9 th reply from Mr.

Finn makes clear that he takes no position on PIPSC’s stated contention that, “… this upcoming round of bargaining, and particularly any bargaining over pension issues would be undertaken without prejudice to the past actions taken by the government under the Act Respecting Public Pensions” . In other words, even if, and for the sake of argument, settlement privilege could be implied based on the wording of the PIPSC’s July 16 th letter, Mr.

Finn expressly refused to adopt that characterization in his September 9 th reply. [ 21 ] I note and accept that the fact that there was nothing in the body of the July 19 th letter stating that it was to be considered as a without prejudice communication is not, on its own, determinative of whether it should be treated as such. Its contents contain no specific proposal for resolution of the litigation (a point I will return to below). It speaks of the possible future, ‘ upcoming round of bargaining ’, over pension issues as intended to be conducted without prejudice to the litigation.

That assumption remained expressly unresolved in the September 9 th reply. Nevertheless, these were not to be the only communications on the issue. Mr. David Griffin, negotiator for PIPSC, restated PIPSC’s position in this regard to Mr. Finn on several occasions, an example of which can be found in an email marked ‘without prejudice’ from him to Mr.

Finn on March 9, 2020, where he wrote: We have had an opportunity to confer with the representative of our New Brunswick groups, and are prepared to proceed in without prejudice centralized collective bargaining of monetary issues with the government of New Brunswick, including supplemental pension plan benefits. [ 22 ] Another example of PIPSC asserting this point is found in an email from Mr. Beaulé to Mr. Finn on September 28, 2020, wherein Mr.

Beaulé writes in part: I am writing in follow-up to our conversation of June 25, 2020, with respect to collective bargaining and the Institute’s proposal for monetary negotiation and without prejudice pension discussions. … We therefore request confirmation from you of the government’s mandate to negotiate pension issues as proposed, by November 2, 2020.

We emphasize that this negotiation of pension issues would be on a without prejudice basis to the existing litigation, including the existence of negotiations. [emphasis added] [ 23 ] PIPSC points to the above as examples of where its implied position, as set out in the July 16 th letter, was being explicitly re- enforced in future communications thus, giving weight to its argument that it was all to be without prejudice from the start. Nevertheless, PIPSC argues that no agreement between the parties was needed to cloak the correspondence as being considered without prejudice. The

express or implied intention of one party is sufficient to produce that effect ( Evergreen Building Ltd. v. IBI Leaseholds Ltd. et al , 2006 BCSC 1190 ). PNB points out that if PIPSC was of the view that its intention alone was sufficient to establish settlement privilege over the impugned correspondence, why would it be necessary for them to ask for confirmation of same. However, I am not convinced that the July 16 th letter was written with the implied intent that the letter itself be considered as covered by settlement privilege.

The letter of July 16 th talks about future events that may occur in bargaining and be considered as privileged not the letter itself. The claim of PIPSC that its July 16 th letter was intended to be covered by settlement privilege is, in my view, too undefined. I cannot find that PIPSC has satisfied the second condition of the test. [ 24 ] In the event I am wrong thus far on either or both of the first two conditions of the test, I turn to the third condition, that the communication must be an attempt to bring about a settlement of the litigation.

In para. 45 of its pre-hearing brief, PIPSC asserts that: In writing the July 16, 2019, it is clear that PIPSC and Beaulé were seeking to effect a settlement of at least part of the litigation. [ 25 ] With respect, I do not look at the letter with the same clarity. What was PIPSC proposing to do to bring about this resolution?

PIPSC further argues in para. 45 of its pre-hearing brief that the ability to negotiate pension benefits, if done on a without prejudice basis: … could be a mechanism through which the parties could address deficiencies in the Public Service Shared Risk Plan described in PIPSC’s Statement of Claim.

It was also a means of addressing the damages that PIPSC was claiming for the conversion of the pension plan. [ 26 ] It may be too simplistic of me to read that portion of the brief (and having heard it in argument) as if PIPSC was saying, ‘ If we can, and do, negotiate an acceptable resolution to the pension issues, then it will resolve the portion of litigation alleging that PNB could or would not negotiate pension issues .’, while on the other hand saying, ‘ If we do negotiate toward a resolution of the pension issues but are unsuccessful, we reserve the right to argue that you refused or we were unable to bargain pension issues ’. [ 27 ] PNB argues that the July 16 th letter is nothing more than correspondence written to initiate the next phase of the bargaining cycle.

I generally agree. PNB states that the correspondence was dealing with the collective bargaining and not the litigation. In other words, PNB argues the distinction must be acknowledged that there is a track on which the litigation is travelling and a separate track the collective bargaining is on. The two tracks, PNB says, did not intersect. The July 16 th letter is on the collective bargaining track. It makes no reference to any proposal aimed at settling the litigation.

PIPSC acknowledges that the letter itself contains no proposal to settle the litigation. [ 28 ] I am not satisfied that the impugned correspondence satisfies the third condition. I do not see the correspondence as being an attempt to settle the litigation. Its primary purpose was, in part, to resolve collective bargaining issues arising from the detrimental effects of a change to the pension plan available to certain of their members.

There are no proposals of any type intended to bring and end to the litigation. [ 29 ] With that said, and in the case that I am wrong in applying the settlement privilege test, I would apply to these circumstances the existing exception to the settlement privilege principle. Earlier in these reasons, I have identified the authorities underpinning the exception. I fully endorse the premise that the court’s fact or truth finding duties should not be lightly displaced.

Settlement privilege is, as noted above, recognized as a fetter to that purpose. [ 30 ] I am also of the view that, in the circumstances of this case, the extent to which either of the impugned correspondence could be used at trial is a matter better left to the trial judge. As I understand the Record, the impugned correspondence is but part of a larger bargaining history involving these parties as told through other emails, letters, minutes of various meetings or other means of communication.

What help, if anything, the impugned correspondence could be to establishing the facts at trial is, in my view, a matter for the trial judge. As noted in the pre-hearing brief of PNB at para. 55, “ PIPSC pleads, inter alia, that it has no opportunity whatsoever to collectively bargain supplemental pension matters … ” (citing para. 30 of PIPSC’s Amended Reply). The degree to which the impugned correspondence can help answer that question is, in my view, best left to the trial judge.

The correspondence at issue may well be interpreted as speaking to a material issue identified in the pleadings. [ 31 ] I return to the reasons of Justice Campbell in NSTU at para. 35, For any evidence to be admitted, it must be relevant, in the sense that it is probative of a material fact in issue. It will be for the judge hearing the Application in Court to determine the weight to be given to the evidence.

[ 32 ] In

summary, I am not convinced that PIPSC has met its burden to establish the proper use of settlement privilege based on the identified test. Even if it had, I would find that the fact-finding role of the court should not, given the issues as framed in these pleadings, fetter the trial judge from considering the impugned correspondence to the degree they may wish. What, if any, significance this correspondence has in establishing the facts of this case will be for the trial judge.

The Motion is dismissed. [ 33 ] Given my determination that the Motion is dismissed, PNB is entitled to costs from PIPSC in the amount of $1,500.00 plus HST. __________________________ Mr. Justice E. Thomas Christie Court of King’s Bench of New Brunswick, Trial Division