K+S POTASH CANADA GENERAL PARTNERSHIP PLAINTIFF/APPLICANT - v. -, 2023 SKKB 225

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 225 Date: 2023 10 26 Docket: QBG-SA-00807-2018 Judicial Centre: Saskatoon ___________________________________________________________________________ BETWEEN: K+S POTASH CANADA GENERAL PARTNERSHIP PLAINTIFF/APPLICANT - and - AECON CONSTRUCTION GROUP INC., also doing business as AECON MINING CONSTRUCTION SERVICES DEFENDANT/RESPONDENT ---------------------------------------------------------------------------------------------------------------- Docket: QBG-SA-00817-2018 Judicial Centre: Saskatoon ___________________________________________________________________________ BETWEEN: AECON MINING CONSTRUCTION SERVICES, a division of AECON CONSTRUCTION GROUP INC.

PLAINTIFFS - and - K+S POTASH CANADA GP and K+S LEGACY GP INC., WOOD plc and WOOD CANADA LIMITED formerly AMEC AMERICAS LIMITED DEFENDANTS - and -

VEOLIA WATER TECHNOLOGIES INC. and VEOLIA WATER SOLUTIONS & TECHNOLOGIES SA THIRD PARTY DEFENDANTS - and - WOOD CANADA LIMITED (formerly AMEC Foster Wheeler Americas, Foster Wheeler Americas Limited and AMERICAS LIMITED) and Wood plc FOURTH PARTY DEFENDANTS - and - AECON MINING CONSTRUCTION SERVICES, a division of AECON CONSTRUCTION GROUP INC., VEOLIA WATER TECHNOLOGIES and VEOLIA WATER SOLUTIONS & TECHNOLOGIES SA DEFENDANTS BY COUNTERCLAIM Counsel: Krista M.

Johanson and Nicola Crema for the applicant, KSPC Matthew Sammon and Kate Costin for the respondent, Aecon ___________________________________________________________________________ DECISION MILLS J. October 26, 2023 ___________________________________________________________________________ Introduction [ 1 ] The applicant, K+S Potash Canada General Partnership [KSPC], currently utilizes the expertise of a consulting firm, FTI Consulting Inc. [FTI]. Aecon Construction Group Inc. [Aecon] has used the services of a consulting firm Rhodes Group [Rhodes].

FTI has acquired Rhodes, and as a result there is a prospect that both KSPC and Aecon will seek to utilize experts in this court action who are employed by the same firm. KSPC brings this application for an order that FTI not appear as a witness for Aecon in these actions because of a conflict of interest. KSPC seeks a further order that Aecon be enjoined from continuing to utilize FTI in these actions. [ 2 ] Aecon responds that it wishes to continue to utilize the expertise of the former employees of Rhodes in this action.

Aecon has not brought an application for an order that FTI not appear as a witness for KSPC – yet. [ 3 ] The parties both acknowledge that on the face of the file there appears to be a conflict of interest as one consulting firm provides and will continue to provide expert opinion for both parties in anticipation of a trial of the action. [ 4 ] As the Supreme Court of Canada has often stated, examination of any issue is contextual.

This file is not different, and it is important to understand the context of what has been occurring in order to properly assess KSPC’s application. [ 5 ] KSPC decided to develop a potash mine near Bethune, Saskatchewan. It entered into two contracts for construction of the mine with Aecon. Construction did not go as planned. The completion of the mine was delayed, and the cost of the construction of the mine was significantly higher than originally anticipated. KSPC blames Aecon for the delays and increased costs.

Aecon claims against KSPC saying that there were significant additional costs not contemplated in the contracts that Aecon was forced to incur as a result of KSPC’s actions and the actions of third parties. [ 6 ] There are five actions in total involving a variety of plaintiffs and defendants. All the actions are being case managed at the same time. The claims and counter-claims total hundreds of millions of dollars. The documents put forward for discovery are in the thousands. The disputes are technically very complex. Orders have been made for the discovery of documents and questioning of witnesses.

The first round of approved questioning has been completed. The second round of questioning has commenced, but there is no indication it has yet been finished. There are outstanding issues about proper responses to questions posed. [ 7 ] In the affidavit of Hans Boedicker, senior vice-president, major claims of KSPC, he described the retaining of FTI as follows:

In 2017 KSPC began considering potential experts for the purpose of providing expert evidence for KSPC in the context of its dispute with Aecon on the Legacy Project (Bethune mine). KSPC ultimately decided to retain FTI because of its experience and expertise in risk identification, project planning, project controls development, construction monitoring, forensic

schedule analysis, accounting and dispute resolution services. An engagement contract between FTI and KSPC regarding services arising from the dispute involved in these actions was signed. [ 8 ] Mr. Boedicker states that KSPC provided FTI with confidential information as well as general documentation materials to allow advice to be provided to KSPC in respect of the actions. [ 9 ] It is unknown whether expert reports in respect of trial have been prepared for either Aecon or KSPC.

Both parties have indicated an intention to have experts originally retained in FTI and Rhodes to give evidence on their behalf at trial. No notice of expertise defining the exact terms of the nature of the opinion evidence to be given has been provided to the other side or to the Court. No expert reports have been exchanged between the parties. There is no evidence that confidential information in fact has been passed between the proposed experts. There is no indication from either side that the experts working on the file have provided any litigation advice in respect of the actions. [ 10 ] Mr.

Boedicker identifies at least 14 individuals working with FTI who have provided services to KSPC under the contract. It appears the primary expert may be Neil Gaudion. Mr. Gaudion left FTI in July of 2020 to start his own firm, Lighthouse Consulting Group [Lighthouse]. KSPC has engaged the services of Lighthouse to continue working on this project along with FTI. [ 11 ] KSPC states that it has been invoiced between June 27, 2017 and November 23, 2021 3,534.2 hours of professional services from FTI at a cost of approximately $1.2 million as it relates to the dispute with Aecon. [ 12 ] Mr.

Boedicker states that prior to June 2022 FTI did not inform KSPC that there may be a conflict of interest arising from FTI’s acquisition of Rhodes. FTI has not sought consent from KSPC to continue acting for Aecon. If such consent had been requested KSPC would have refused. Rhodes Group Circumstances [ 13 ] Andrew Rhodes provided in his affidavit that he was the former founder and president of the Rhodes Group. It was a construction claims consulting firm. He opined that on July 9, 2018 Aecon retained Rhodes as a consultant with respect to issues of expert analysis on construction projects.

The retainer involved providing advice in respect of the actions currently before the Court. In regards to FTI’s acquisition of Rhodes he states that FTI is a firm providing expert advisory and consulting services in which clients can retain individual experts to provide independent expert opinions in, among other things, construction disputes. He states that in September 2020 negotiations with FTI commenced regarding FTI’s acquisition of Rhodes. On May 1, 2021 the acquisition transaction closed, and Rhodes’ staff became employees of FTI. [ 14 ] Mr.

Rhodes states that Rhodes continued to work out of its premises in Pittsburgh with the same group of individuals working on the Aecon file continuing to do so. He states that before May 1, 2021 Rhodes provided FTI with its ongoing client list which included Aecon. FTI and Rhodes agreed that there would be an ethical wall placed in relation to the Aecon matter and such was established by way of email of May 4, 2021.

He states that pursuant to that ethical wall neither he nor members of his team have had access to work product or communications generated by any FTI staff or experts in respect of work that has been performed for KSPC. He states that himself and his team working on the Aecon mandate are precluded from accessing work product of any other FTI employees working for KSPC in respect of this dispute. He states that all of his work product is stored in a segregated electronic location and not accessible to other FTI employees.

He states that since the acquisition of Rhodes by FTI he has not received any confidential information from any of the staff at FTI as it relates to work for services provided for the benefit of KSPC. He states that his ethical obligations are not to communicate with members of the KSPC team and that both he and his team have adhered to the strictest standard of confidentiality which were required by FTI.

He states that he has an obligation to provide opinion evidence of his objective and non- partisan to the Court and that although other staff of FTI may be providing the same services to KSPC, it will have no bearing on his opinion. [ 15 ] There are two assumptions contained in the background to this file. The first is that KSPC assumes that if they are successful in their application FTI will continue to be able to act for it in respect of the expert opinion to be provided but that Aecon will not be entitled to continue to use the services of FTI’s Rhodes Group personnel.

If KSPC is successful in its application then Aecon will have to find a new group of experts. Aecon has taken no position presently with respect to the continued involvement of KSPC’s FTI experts.

The Court only deals with applications that are currently before it, but as case management judge it is conceivable, if not probable, that a ruling in KSPC’s favour on this application will result in an identical application being made by Aecon which will rely on the identical facts and identical law and thus potentially have some measure of success. [ 16 ] The second assumption made by KSPC is that the expert opinions from the current experts will be adverse resulting in two people employed by the same firm criticizing each other’s work product.

Neither side has seen the other’s opinions, and so the extent of this controversy is unknown. For the purpose of this application, given the continued litigation and involvement of the experts over the last five plus years, the Court will assume that the opinions will be adverse in nature. KSPC’s Legal Position [ 17 ] KSPC states there is a clear and direct conflict of interest in the situation described. They state that having FTI prepare expert opinion for both sides in the same dispute is untenable.

They state that FTI has received and continues to receive confidential information from KSPC that is at risk of being disclosed. They state that for FTI to testify at the trial of the matter it would be professionally embarrassing and problematic in respect of FTI’s duty to the Court as an expert witness. They state that FTI should not have accepted a subsequent retainer with Aecon. KSPC frames the issue as to whether or not FTI can participate on behalf of Aecon in these proceedings and assumes that FTI can continue to act for KSPC.

KSPC argues that its employment contract with FTI requires FTI not to act for any other party who is adverse in interest to it.

[18] KSPC indicates that it is seeking no relief from FTI, and FTI has not provided, other than through Mr. Rhodes,any affidavit in respect of this application. KSPC did not serve FTI with the application. KSPC provides correspondence flowing betweenit and FTI respecting FTI’s acquisition of Rhodes. KSPC suggests considerable concern over the lack of clarity and informationrespecting the take-over that has been provided to it.

KSPC raises the issue of individuals working on behalf of Aecon who are membersof professional organizations and that the professional code of conduct or canons of ethics of these associations all provide that theyshould avoid conflicts of interest. [19] KSPC states that this Court has an inherent jurisdiction to control its processes which includes the jurisdiction toremove experts from testifying when an obvious conflict of interest exists. KSPC relies heavily upon the comments of the SupremeCourt of Canada in MacDonald Estate v Martin, (SCC), [1990] 3 SCR 1235 (WL) [MacDonald Estate].

That case dealtwith solicitors who had a conflict of interest. The principles in that case, however, have been applied to experts in possession ofconfidential information. This was identified in Irving Paper Limited v Atofina Chemicals Inc.(2008), (ON SC), 89OR (3d) 578 (Ont Sup Ct) [Irving Paper]. At paragraph 34 of that decision the Court identifies numerous cases in which the issue ofremoval of experts, or at least consideration of that issue with the assumption of jurisdiction, were identified.

It is clear from that caseand the ones cited therein that this Court does have jurisdiction to disqualify an expert from giving opinion evidence in the case of aconflict of interest. It is important to note, however, in paragraph 35 of Irving Paper that a quote from Rumley v British Columbia, 2002BCSC 405, goes on to state: 35 … The principles in MacDonald Estate, should be applied cautiously when the circumstances are outside the particular issue with whichthat cases was concerned -- the unique and fiercely protected confidentiality which adheres to the solicitor/client relationship.

The role ofan expert witness who does not participate in litigation planning or strategy does not lend itself to the type of analysis applied to the roleof a solicitor. [20] KSPC bases its argument almost entirely on the principles established in MacDonald Estate and relies on thecomments enunciated there. The general principles regarding conflicts of interest as it relates to solicitors are found at paragraphs 48through 53 as follows: 48 Typically, these cases require two questions to be answered:

(1) Did the lawyer receive confidential information attributable to asolicitor and client relationship relevant to the matter at hand?

(2) Is there a risk that it will be used to the prejudice of the client? 49 In answering the first question, the court is confronted with a dilemma. To explore the matter in depth may require the veryconfidential information for which protection is sought to be revealed. This would have the effect of defeating the whole purpose of theapplication. American courts have solved this dilemma by means of the "substantial relationship" test. Once a "substantial relationship"is shown, there is an irrebuttable presumption that confidential information was imparted to the lawyer. In my opinion, this test is toorigid.

There may be cases in which it is established beyond any reasonable doubt that no confidential information relevant to the currentmatter was disclosed. One example is where the applicant client admits on cross-examination that this is the case. This would not availin the face of an irrebuttable presumption.

In my opinion, once it is shown by the client that there existed a previous relationship which issufficiently related to the retainer from which it is sought to remove the solicitor, the court should infer that confidential information wasimparted unless the solicitor satisfies the court that no information was imparted which could be relevant. This will be a difficult burdento discharge.

Not only must the court's degree of satisfaction be such that it would withstand the scrutiny of the reasonably-informedmember of the public that no such information passed, but the burden must be discharged without revealing the specifics of theprivileged communication. Nonetheless, I am of the opinion that the door should not be shut completely on a solicitor who wishes todischarge this heavy burden. 50 The second question is whether the confidential information will be misused. A lawyer who has relevant confidential informationcannot act against his client or former client.

In such a case the disqualification is automatic. No assurances or undertakings not to usethe information will avail. The lawyer cannot compartmentalize his or her mind so as to screen out what has been gleaned from the clientand what was acquired elsewhere. Furthermore, there would be a danger that the lawyer would avoid use of information acquiredlegitimately because it might be perceived to have come from the client. This would prevent the lawyer from adequately representing thenew client. Moreover, the former client would feel at a disadvantage.

Questions put in cross-examination about personal matters, forexample, would create the uneasy feeling that they had their genesis in the previous relationship. The answer is less clear with respect tothe partners or associates in the firm. Some courts have applied the concept of imputed knowledge. This assumes that the knowledge ofone member of the firm is the knowledge of all. If one lawyer cannot act, no member of the firm can act. This is a rule that has beenapplied by some law firms as their particular brand of ethics.

While this is commendable and is to be encouraged, it is, in my opinion, anassumption which is unrealistic in the era of the mega-firm. Furthermore, if the presumption that the knowledge of one is the knowledgeof all is to be applied, it must be applied with respect to both the former firm and the firm which the moving lawyer joins. Thus there is aconflict with respect to every matter handled by the old firm that has a substantial relationship with any matter handled by the new firmirrespective of whether the moving lawyer had any involvement with it.

This is the "overkill" which has drawn so much criticism in theUnited States, to which I have referred above. 51 Moreover, I am not convinced that a reasonable member of the public would necessarily conclude that confidences are likely to bedisclosed in every case despite institutional efforts to prevent it. There is, however, a strong inference that lawyers who work togethershare confidences.

In answering this question, the court should therefore draw the inference, unless satisfied on the basis of clear andconvincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the "tainted" lawyer to themember or members of the firm who are engaged against the former client. Such reasonable measures would include institutionalmechanisms such as Chinese walls and cones of silence.

These concepts are not familiar to Canadian courts, and indeed do not seem tohave been adopted by the governing bodies of the legal profession. … 53 These standards will, in my opinion, strike the appropriate balance among the three interests to which I have referred. In givingprecedence to the preservation of the confidentiality of information imparted to a solicitor, the confidence of the public in the integrity ofthe profession and in the administration of justice will be maintained and strengthened. On the other hand, reflecting the interest of a

member of the public in retaining counsel of her choice and the interest of the profession in permitting lawyers to move from one firm toanother, the standards are sufficiently flexible to permit a solicitor to act against a former client provided that a reasonable member of thepublic who is in possession of the facts would conclude that no unauthorized disclosure of confidential information had occurred orwould occur. [21] In respect of the first branch of the test that upon establishment of a relationship between the experts related totheir retainers the Court should infer confidential information was imported, KSPC says that that situation obviously exists and that theassumption that there has been a sharing of confidential information must be applied to the experts’ knowledge.

KSPC argues that theethical wall agreement and information related to it is not sufficient to discharge the burden that no information was shared that could berelevant. [22] KSPC argues that the second question of whether confidential information will be misused is automaticallyassumed upon the situation being identified and that it matters little that there is an ethical wall agreement or undertakings not to use thatinformation – it will be shared. [23] KSPC goes on to argue in addition that communication between lawyers and experts can attract protection oflitigation privilege.

They cite the case of Moore v Getahun, 2015 ONCA 55, 381 DLR (4th) 471. That case discussed the revealing ofdisclosure of draft reports including strategy between counsel and expert witnesses at paragraphs 67 through 76: [67] I now turn to the issue of the extent to which consultations between counsel and expert witnesses need to be documented anddisclosed to an opposing party. [68] The starting point for analysis is that such consultations attract the protection of litigation privilege.

Litigation privilege protectscommunications with a third party where the dominant purpose of the communication is to prepare for litigation. As explained by theSupreme Court of Canada in Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319, [2006] S.C.J.

No. 39, 2006 SCC 39, at para. 27,the object of litigation privilege "is to ensure the efficacy of the adversarial process", and "to achieve this purpose, parties to litigation . . .must be left to prepare their contending positions in private, without adversarial interference and without fear of premature disclosure".These concerns are important in the context of the preparation of expert witnesses and their reports. [69] In Blank, the court noted, at para. 34, that litigation privilege creates "a 'zone of privacy' in relation to pending or apprehendedlitigation".

The careful and thorough preparation of a case for trial requires an umbrella of protection that allows counsel to work withthird parties such as experts while they make notes, test hypotheses and write and edit draft reports. [70] Pursuant to rule 31.06(3), the draft reports of experts the party does not intend to call are privileged and need not be disclosed.Under the protection of litigation privilege, the same holds for the draft reports, notes and records of any consultations between expertsand counsel, even where the party intends to call the expert as a witness. [71] Making preparatory discussions and drafts subject to automatic disclosure would, in my view, be contrary to existing doctrine andwould inhibit careful preparation.

Such a rule would discourage the participants from reducing preliminary or tentative views to writing,a necessary step in the development of a sound and thorough opinion. Compelling production of all drafts, good and bad, woulddiscourage parties from engaging experts to provide careful and dispassionate opinions and would instead encourage partisan andunbalanced reports.

Allowing an open-ended inquiry into the differences between a final report and an earlier draft would undulyinterfere with the orderly preparation of a party's case and would run the risk of needlessly prolonging proceedings. [72] I recognize that the wisdom of extending litigation privilege to the preparation of expert reports has been questioned by somejudges: see Browne (Litigation guardian of) v. Lavery (2002), (ON SC), 58 O.R. (3d) 49, [2002] O.J. No. 564(S.C.J.), at paras. 65-71; Aviaco International Leasing Inc. v. Boeing Canada Inc., [2002] O.J. No. 3799, (S.C.J.), atpara. 16.

However, the law currently imposes no routine obligation to produce draft expert reports: Conceicao Farms Inc. v. ZenecaCorp. (2006), (ON CA), 83 O.R. (3d) 792, [2006] O.J. No. 3716 (C.A.), at para. 14; Mendlowitz v. Chaing, [2011]O.J. No. 6648, 2011 ONSC 2341 (S.C.J.), at paras. 20-24. [73] It is important to note that the litigation privilege attaching to expert reports is qualified, and disclosure may be required in certainsituations. [74] The most obvious qualification is that the Rules of Civil Procedure require disclosure of the opinion of an expert witness beforetrial.

If a party intends to call the expert as a witness at trial, rule 31.06(3) entitles the opposite party on oral discovery to "obtaindisclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of the party being examined". [75] As well, the party who intends to call the expert witness is required to disclose the expert's report and the other informationmandated by rule 53.03(2.1). The result is that what has been called "the foundational information" for the opinion must be disclosed:Conceicao Farms, at para. 14.

Bryant, Lederman and Fuerst refer to this as an "implied waiver" of privilege over the facts underlying anexpert's opinion that results from calling the expert as a witness: Alan W. Bryant, Sidney N. Lederman and Michelle K. Fuerst, Sopinka,Lederman & Bryant: The Law of Evidence in Canada, 4th ed. (Markham, Ont.: LexisNexis, 2014), at para. 14.220. These authors favourrestricting the implied waiver "to material relating to formulation of the expressed opinion" (at para. 14.224).

They state that cautionshould be exercised before requiring "wide-ranging disclosure of all solicitor-expert communications and drafts of reports", as such apractice could encourage "a general practice among solicitors of destroying drafts after they are no longer needed just to avoid theproblem" (at para. 14.226). [76] The second qualification is that, as stated in Blank, at para. 37, "litigation privilege, unlike the solicitor-client privilege, is neitherabsolute in scope nor permanent in duration".

Litigation privilege yields where required to meet the ends of justice, and "[i]t is not ablack hole from which evidence of one's own misconduct can never be exposed to the light of day": Blank, at para. 44. [24] KSPC states that access to litigation planning or strategy is unquestionably prejudicial and if there is a risk ofdisclosure can form the basis for disqualification. It cites the Irving Paper comments as authority. KSPC finally frames the issue as to

whether or not all reasonable measures have been taken to ensure no disclosure has occurred would occur. In support of that position KSPC focuses on FTI’s failure to inform it of the acquisition of the Rhodes Group and to come clean with KSPC only after repeated requests for information had been provided. [ 25 ] KSPC argues that there is a contractual duty from FTI to avoid a conflict of interest. It relies on the Secretariat Consulting PTE Ltd., Secretariat International UK Ltd., Secretariat Advisors LLC v A Company , [2021] EWCA Civ 6 [ Secretariat ].

This case is a British case that appears to be the only one found by either side that deals directly with the situation of a conflict of interest as is found here: that is, two experts in the same firm retained by adverse parties giving expert opinions for each of them. This case was heavily relied upon by KSPC. The factual situation is slightly different however. In that case Secretariat had been retained by A company to provide an expert opinion on a construction project. Sometime later Secretariat was approached by B company to provide an expert opinion on the same issues involving the same project.

Secretariat despite a contractual obligation to A company not to enter into conflicts of interest took the retainer from B company. The application in court was directed to Secretariat who defended its decision, not at B company. Both A company and B company wished to retain Secretariat as their expert. The trial judge determined that there was a breach of fiduciary duty by Secretariat in respect of A company and ordered that Secretariat terminate its retainer with B company. The appellate court expressed considerable reserve about finding a fiduciary obligation existed between A company and its expert.

It should be noted that the expertise appears to be similar to the one found in this case where the dispute was over a large construction project, and the expertise was sought in respect of increased costs associated with delay and disruption in completing the contract. The appeal court ultimately decided that given its reservations about the notions of a fiduciary duty in their circumstance and the fact that a contract existed they could decide the issue on a contractual basis only.

The appeal court said that under the contract there was an obligation not to take on a retainer that was in conflict with the original one and ordered Secretariat not to perform any further work for B company. Although the conflict situation that the expert ended up in can be characterized as the same as found here, the method of getting there is significantly different – that is both FTI and the Rhodes group had been contracted to provide expert opinion advice by each of Aecon and KSPC before any conflict existed.

The Legal Position of Aecon [ 26 ] Aecon in its approach to the application looks at the factual claims of KSPC with some suspicion. The evidence from Aecon shows that the Rhodes Group team, now absorbed into FTI, continues to work for Aecon in providing expert opinion as to the assessment of damages arising out of the contracts. Aecon through the affidavit of Mr. Rhodes provides further detail with respect to the ethical wall agreement that had been put into place. In particular Mr.

Rhodes states that there has been no communication between the Aecon team and other employees of FTI with respect to the Aecon engagement. Mr. Rhodes states that the electronic security walls have been put in place and are periodically audited for compliance and an attempted or actual breach would be reported immediately. Aecon emphasizes that while there is speculation by KSPC that confidential information may have already passed from FTI to the Aecon team, there is no evidence that such has occurred, and given the ethical wall in place, there is no possibility that such will occur in the future. Mr.

Rhodes states that he continues preparing the expert report requested of him and that Aecon intends that Mr. Rhodes will testify as their expert in respect of damages at trial. There is a concern expressed by KSPC that the FTI employees working on both these projects may share confidences. Aecon responds that it appears there is only one employee of FTI that continues to work for that company and that the balance of the work being conducted has been subcontracted out to the Lighthouse which is run by Mr. Gaudion who is the principal contact formally at FTI. Mr.

Rhodes asserts that he was not involved in the litigation planning and preparation on this file but was retained after the claims had commenced. Aecon argues that KSPC’s reliance on the MacDonald Estate decision is misguided and that decision applies only to lawyers and the principles enunciated there are of no assistance to KSPC in the application. Aecon argues that the proper analysis requires a review of the decision of the Supreme Court of Canada in White Burgess Langille Inman v Abbott and Haliburton Co. , 2015 SCC 23 , [2015] 2 SCR 182 [ White Burgess ] .

This is a case about whether an expert should be disqualified in advance of trial based on an allegation of bias. Aecon argues that a review of the White Burgess decision is a complete roadmap for determining whether an order should issue now preventing Mr. Rhodes from testifying as an expert witness. Aecon argues that lawyers and experts have different roles to play in respect of litigation and that to simply adopt MacDonald Estate to this situation is inappropriate. Aecon points to The Queen’s Bench Rules at Rule 5-37 which reads: 5-37

(1) In giving an opinion to the Court, an expert appointed pursuant to this Division by one or more parties or by the Court has a duty to assist the Court and is not an advocate for any party.

(2) The expert’s duty to assist the Court requires the expert to provide evidence in relation to the proceeding as follows: (

a) to provide opinion evidence that is objective and non-partisan; (

b) to provide opinion evidence that is related only to matters that are within the expert’s area of expertise; and (

c) to provide any additional assistance that the Court may reasonably require to determine a matter in issue.

(3) If an expert is appointed pursuant to this Division by one or more parties or by the Court, the expert shall, in any report the expert prepares pursuant to this Division, certify that the expert: (

a) is aware of the duty mentioned in subrules (1) and (2); (

b) has made the report in conformity with that duty; and (

c) will, if called on to give oral or written testimony, give that testimony in conformity with that duty. [ 27 ] Aecon further argues that there has obviously been a delay for tactical reasons and the presentation of this application and as such should be dismissed on that basis alone. Aecon argues that KSPC became aware of a potential for an alleged contract with FTI in April 2022. On September 13, 2022 in an application before me KSPC wished to have Aecon deliver their expert report to assess Aecon’s damages claim at that time.

On September 14, 2022 KSPC advised FTI that KSPC may bring an application to prevent FTI from providing an expert report for Aecon. KSPC subsequently served this motion on February 15, 2023, and it further appears that some of the material may have been prepared in October 2022. Aecon argues that it was allowed to continue without any

notice to use Mr. Rhodes in preparation of expert opinion to its detriment and that essentially KSPC allowed Aecon to expend time andresources in obtaining an expert report and seeking production of it when it knew that it would be challenging the use of that witness.Aecon relies on the decision of Dhingra v Kang, 2022 BCSC 2299, as authority for this proposition. [28] Aecon takes the position that the application by KSPC is in fact for an injunction and that the three-part testcontained in the case law for determining whether to issue an injunction has neither been argued nor substantiated.

I do not acceptAecon’s contention in this regard. This is not an injunction application, and no further analysis in that regard will be done. Analysis [29] KSPC is right in stating that the principles in MacDonald Estate can be applied not only in a law firm contextbut in the context of experts at trial.

However, there is no case that says that such principles shall be applied indiscriminately to experts.Rather the case law suggests that although the principles in MacDonald Estate may be applied to experts, it should be done so cautiouslyas in Towers Ltd. v Quinton’s Cleaners Ltd., 2009 MBQB 34 at paras 55 - 57, 237 Man R (2d) 100, where Joyal J. summarized the law inthis area: 55 In examining the arguments by Quinton's with respect to the rejection or disqualification of Dr.

Feenstra's evidence based upon apotential conflict of interest, care must be taken to avoid a reflexive application of the phrase "conflict of interest". That concept is moreprecisely and typically used in the legal context of the solicitor-client relationship. It is worth noting that the issue of conflict of interestas raised in the seminal case of MacDonald Estate v. Martin, (SCC), [1990] 3 S.C.R. 1235, arose in the context ofwhether a law firm should be disqualified from continuing to act.

The principles flowing from that case have been applied in someinstances to experts in possession of confidential information. However, as in L.R. v. British Columbia, 2002 BCSC 405, [2002] B.C.J.No. 565 (S.C.) (QL), the courts have urged caution in respect of misplaced analogies to the solicitor-client relationship: [25] ... [T]he principles in MacDonald Estate should be applied cautiously when the circumstances are outside the particular issue withwhich that case was concerned - the unique and fiercely protected confidentiality which adheres to the solicitor/client relationship.

Therole of an expert witness who does not participate in litigation planning or strategy does not lend itself to the type of analysis applied tothe role of a solicitor. ... [Emphasis added.] 56 If, in the context of expert witnesses, caution is required when attempting to apply "conflict of interest" principles, so too is itnecessary to remember that there is no property in witnesses. Supporting that proposition, is a line of authority that was discussed inIrving Paper Ltd. v. Atofina Chemicals Inc. (2008), (ON SC), 89 O.R. (3d) 578 (Sup. Ct.

J.), wherein Rady J. notedthe following: [39] There is another line of pertinent authority, commencing with Harmony Shipping Co. S.A. v. Davis, [1979] 3 All E.R. 177, [1979] 1W.L.R. 1380 (C.A.). [40] In that case, a handwriting expert gave an opinion to the plaintiff and then, not realizing he had already given an opinion, gave anopinion to the defendant. When the expert realized his mistake, he refused to accept further instructions from the defendant. Thedefendant subpoenaed the expert.

In holding that the expert could be called to testify, Lord Denning noted that there is no property in awitness: So we have before us a question of principle. If an expert witness has been consulted by one side and has given his opinion to that side,can he thereafter be consulted and subpoenaed by the other side to give his opinion on the facts of the case? That is the issue which thiscourt has to decide. So far as witnesses of fact are concerned, the law is as plain as can be. There is no property in a witness. The reason is because the courthas a right to every man's evidence.

Its primary duty is to ascertain the truth. Neither one side nor the other can debar the court fromascertaining the truth either by seeing a witness beforehand or by purchasing his evidence or by making communication to him. In noway can one side prohibit the other side from seeing a witness of fact, from getting the facts from him and from calling him to giveevidence or from issuing him with a subpoena. ... The question in this case is whether or not that principle applies to expert witnesses. They may have been told the substance of a party'scase.

They may have been given a great deal of confidential information. On it they may have given advice to the party. Does the ruleapply to such a case? Many of the communications between the solicitor and the expert witness will be privileged. They are protected by legal professionalprivilege. They cannot be communicated to the court except with the consent of the party concerned. That means that a great deal of thecommunications between the expert witness and the lawyer cannot be given in evidence to the court.

If questions were asked about it,then it would be the duty of the judge to protect the witness (and he would) by disallowing any questions which infringed the rule aboutlegal professional privilege or the rule protecting information given in confidence, unless, of course, it was one of those rare cases whichcome before the courts from time to time where in spite of privilege or confidence the court does order a witness to give further evidence. [41] Lord Denning concluded his judgment with "a further consideration of public policy" as follows: If an expert could have his hands tied by being instructed by one side, it would be very easy for a rich client to consult each of theacknowledged experts in the field.

Each expert might given [sic] an opinion adverse to the rich man, yet the rich man could say to each,'Your mouth is closed and you cannot give evidence in court against me'. We were told that in the Admiralty courts where there are avery limited number of experts, one side may consult every single one of them. Does that mean that the other side is debarred fromgetting the help of any expert evidence because all the experts have been taken up by the other side? The answer is clearly No. It comes

back to the proposition which I stated at the beginning. There is no property in a witness as to fact. There is no property in an expertwitness as to the facts he has observed and his own independent opinion on them. There being no such property in a witness, it is theduty of a witness to come to court and give his evidence in so far as he is directed by the judge to do so. [42] Following Harmony Shipping, Canadian courts have on occasion refused to disqualify an expert on the basis that he or she receivedconfidential information through a previous retainer with another party to the proceeding.

See, for example, Children's Aid Society ofToronto v. M.(D.), (ON CJ), [2001] O.J. No. 4425, 88 C.R.R. (2d) 177 (Ct. J.); Trilea Centres Inc. v. CummingCockburn Ltd. (1991), (ON SC), 5 O.R. (3d) 598, [1991] O.J. No. 1812 (Gen. Div.); R. v. McGowan, [2005] O.J. No.3813, 26 M.V.R. (5th) 152 (S.C.J.); Cousineau v. St. Joseph's Health Centre, 1990 CarswellOnt. 439 (H.C.); and Edmonton (City) v.Lovat Tunnel Equipment Inc., [2000] A.J.

No. 214, 2000 ABQB 111. [Emphasis added.] 57 The applicable principles governing the potential disqualification or non-use of an expert can be distilled to three propositions, asidentified in Labbee v. Peters (1996), 10 C.P.C. (5th) 312 at para. 13 (Alta. Q.B.). Those three propositions would appear to reconcilethe relevant principles emanating from professional codes of conduct as well as the jurisprudence in respect of "conflict of interest". Theprinciples are as follows:

(1) There is no property in a witness.

(2) Even though a party has retained an expert and communicated privileged information to the expert, the expert can still provide anopinion for an opposing party and may be called as a witness at trial.

(3) The expert may not be questioned concerning any privileged material he or she received from the opposing solicitor or disclose anyopinion given to the opposing solicitor. [30] I accept that is an accurate statement of the law. The application of MacDonald Estate is not so clear cut assuggested by KSPC.

It is clear from the case law and Rule 5-37 that experts owe a dual duty to a Court and their client, and the hard andfast rules referred to in MacDonald Estate do not necessarily apply in all contexts of expert witnesses. [31] The basis of KSPC’s argument is that FTI has received and continues to receive confidential information from itand that confidential information is at a risk of being disclosed to Mr. Rhodes and his team who is proposed to be the expert witness forAecon to provide opinion evidence at trial.

There is no evidence of actual disclosure nor can KSPC point to any situation whereconfidential information has been utilized by Mr. Rhodes in preparing an opinion. That information obviously could not be availableuntil such time as the expert opinion report has been prepared and submitted as part of the trial discovery process to KSPC. KSPC statesthat it will be relying upon advice and opinion from Mr. Gaudion and Mr. Slavis, both of whom work for Lighthouse and have beenretained with the agreement of KSPC to continue working on this file.

I do not accept that once the conflict of interest has been identifiedand that the potential for disclosure of confidential information exists that there is an automatic disqualification of an expert. InMacDonald Estate the Court has stated that if there is a previous relationship sufficiently related to the current retainer the Court shouldinfer confidential information was imparted unless the solicitor satisfies the Court that no information was imparted which could berelevant. This will be a difficult burden to discharge.

Even if I was to apply this exact test in respect of experts as opposed to solicitors,the question still remains as to whether confidential information has been received by the Rhodes Group team working for Aecon. In thatregard the ethical wall agreement appears to satisfy that issue as it cannot be said on a presumptive basis that the Rhodes Group hasreceived confidential information from FTI as it relates to their retainer. There further is no evidence of actual receipt of such confidentialinformation. It would appear that the mischief sought to be prevented has not occurred.

KSPC argues that although the merger waseffective on May 1, the actual ethical wall agreement was not put in place until May 4. I do not accept that assertion based on theevidence before me. It appears that the ethical wall agreement was put in place upon the merger taking place. [32] Is it possible that it would occur in the future? The answer, of course, is that anything is possible, but in thesituation here before trial KSPC will have received the expert opinion proposed from Mr.

Rhodes and have an opportunity to examinethe information upon which he bases his opinion to determine if there has been any confidential information utilized. If that hasoccurred, the issues surrounding Mr. Rhodes’ expert testimony will take on a different light as determined by the trial judge. [33] There are some other bases upon which the expert could be disqualified. KSPC has argued that the contractualduty to avoid conflicts of interest results in such disqualification. Aecon and KSPC both have valid contracts with their respectiveexperts.

No action has been taken against FTI based on that contract between KSPC and FTI. FTI through the filing of affidavits of itsemployees takes the position that it is entitled to continue working on behalf of both parties. Resolution of that contractual dispute wouldhave to involve FTI as a party. It does not. This situation is not the same as the Secretariat case where a clear and intentional decisionwas made to act for B company specifically, which was a breach of contract.

Secretariat is distinguishable on that basis alone, and I willnot apply it to this situation. [34] KSPC argues that FTI owes a fiduciary duty of loyalty to it and has breached that duty and as such it can nolonger act on behalf of Aecon. The notion of the breach of a fiduciary duty of loyalty has been mentioned earlier in this decision. TheCourt in Secretariat was not prepared to go down that road and neither am I. Again, if a fiduciary duty exists to KSPC only and it hadbeen breached that would be grounds presumably for KSPC to cancel its contract and perhaps to demand return of fees paid.

It does notin my opinion provide a basis for ordering that no work can be done for Aecon in the context of the action before us. [35] The principles enunciated in Labbee v Peters (1996), 10 CPC (5th) 312 (Alta QB), were referred to by me at theend of paragraph 29 previously. They bear repeating.

(1) There is no property in a witness;

(2) Even though a party has retained an expert and communicated privileged information to the expert, the expert canstill provide an opinion for an opposing party and may be called as a witness at trial; and

(3) The expert may not be questioned concerning any privileged material that he or she received from the opposing solicitor or disclose any opinion given to the opposing solicitor. [ 36 ] Applying these principles appears to suggest in the circumstance of this case it is possible for Mr. Rhodes as an expert to provide opinion evidence on behalf of Aecon. The decision remains as to whether or not he should be allowed to do so. Part of the discussion has to involve the notion of where the action stands. As I have indicated earlier, this is an extremely complex action that has been going on for some five years.

The factual circumstances have provided for thousands of pages of material that must be reviewed and analyzed. Expert reports have been in the process of being prepared for over four years. Questioning has been almost completed. Discovery of documents has been almost completed. The next step is the preparation of actual expert opinion which will be submitted by the parties to the Court and each other at a pre-trial conference. Both parties have expended significant sums of money plus time and effort in providing information to the experts for the purpose of preparing their opinions.

This fact scenario would weigh against an order for exclusion of experts absent proof of access to and misuse of confidential information. [ 37 ] Aecon has relied heavily on the principles contained in the White Burgess case as being applicable to this situation. In the sense that any testimony of an expert witness is subject to The Queen’s Bench Rules and the criteria established by the Supreme Court of Canada in White Burgess they are correct. White Burgess was a decision involving a ruling on bias and the disqualification of an expert on that basis.

The application of the principles in White Burgess though are not to be conducted in my opinion at this time. There is no guarantee that after presentation of whatever expert witness is proposed by the parties at trial that the trial judge will accept that the evidence of that expert accords with the principles in White Burgess and The Queen’s Bench Rules .

It will be up to the trial judge to determine based on the evidence led before her/him as to whether the person proposed can be accepted as a witness based on the principles in White Burgess and, if so accepted, what weight to be given to the evidence presented by them. That is a matter for the trial judge as it is in any case. [ 38 ] I appreciate this puts the parties in a difficult position. Each would like to continue to utilize the services of their expert in preparation for and at trial.

This decision leaves open the potential that the trial judge would not accept the expert opinion offered by either FTI or Rhodes, based on the principles in the White Burgess case. That would be a consideration in any event. The parties are faced with tactical rather than legal decisions for the most part. I view this application by KSPC to be based partially on tactics. They have delayed the bringing of this application and in fact were seeking the expert opinion from Rhodes in a court application before me when they knew that a potential conflict existed.

KSPC’s approach to disqualify the Rhodes group only, when it appears that a disqualification of experts was to be successful, it probably should apply to both Rhodes and FTI, suggests a desire for an advantage over Aecon which would be forced to obtain the services of another expert resulting in a delay of their action and significantly increase costs only to Aecon. This tactical maneuver further supports the decision to dismiss the application. [ 39 ] For the reasons above, the application by KSPC is dismissed with costs in any event of the cause to be taxed on column 3. J. R.C. MILLS