Abbott and Haliburton Company v. WBLI Chartered Accountants, 2013 NSCA 66

NOVA SCOTIA COURT OF APPEAL Citation: Abbott and Haliburton Company v. WBLI Chartered Accountants , 2013 NSCA 66 Date: 20130524 Docket: CA 397520 Registry: Halifax Between: Abbott and Haliburton Company Limited; A.W. Allen & Son Limited; Berwick Building Supplies Limited; Bishop ’ s Falls Building Supplies Limited; Arthur Boudreau & Fils Ltée; Brennan Contractors & Supplies Ltd.; F. J. Brideau & Fils Limitee; Cabot Building Supplies Company

(1988) Limited; Robert Churchill Building Supplies Limited; CDL Holdings Limited, formerly Chester Dawe Limited; Fraser Supplies (1980 )Ltd.; R. D. Gillis Building Supplies Limited; Yvon Godin Ltd.; Truro Wood Industries Limited/Home Care Properties Limited; Hann ’ s Hardware and Sporting Goods Limited; Harbour Breton Building Supplies Limited; Hillier's Trades Limited; Hubcraft Building Supplies Limited; Lumbermart Limited; Maple Leaf Farm Supplies Limited; S.W. Mifflin Ltd.; Nauss Brothers Limited; O ’ Leary Farmers ’ Co-operative Ass ’ n.

Ltd.; Pellerin Building Supplies Inc.; Pleasant Supplies Incorporated; J. I. Pritchett& Sons Limited; Centre Multi-Décor De Richibucto Ltée; U. J. Robichaud & Sons Woodworkers Limited; La Quincaillerie Saint-Louis Ltée; R & J Swinamer ’ s Supplies Limited; 508686 N.B. INC. operating as T.N.T. Insulation and Building Supplies; Taylor Lumber and Building Supplies Limited; Two by Four Lumber Sales Ltd.; Walbourne Enterprises Ltd.; Western Bay Hardware Limited; White ’ s Construction Limited; D. J.

Williams and Sons Limited; and Woodland Building Supplies Limited Appellants AND: White Burgess Langille Inman, carrying on business as WBLI Chartered Accountants First Respondent AND: R. Brian Burgess Second Respondent Judges: MacDonald, C.J.N.S.; Oland and Beveridge, JJ.A. Appeal Heard: December 12, 2012, in Halifax, Nova Scotia Held: Leave to appeal granted and appeal dismissed in part, per reasons for judgment of Beveridge J.A.; Oland J.A. concurring; MacDonald C.J.N.S. dissenting by separate reasons. Counsel: Wanda M. Severns and Renée Fougere (Student at Law), for the appellants Alan L. W.

D ’ Silva, Erica Tait, and Aaron Kreaden, for the respondents Dissenting Reasons for judgment : (MacDonald, C.J.N.S.)

OVERVIEW [ 1 ] Expert witnesses occupy an uncomfortable seat when testifying in Canadian courts. This is because they appear to have divided loyalties. On one hand, they are there to assist the court by offering advice in areas where special knowledge is required. Here their loyalty is to the court, which understandably commands a level of objectivity. On the other hand, the court typically does not select them. Instead they are retained by and testify on behalf of one of the combatants. This suggests a lack of objectivity and perhaps even advocacy.

Not surprisingly, therefore, they are often accused of being biased. Some are even called “hired guns”. [ 2 ] Typically, an expert’s objectivity is tested by way of cross-examination by the opposing party. This then allows the judge to calibrate the weight, if any, to accord the proffered opinion. However, in exceptional circumstances, a proposed expert’s independence or impartiality may appear to be so suspect that he or she will be prevented from testifying from the outset.

In this appeal, we explore what it would take to justify such a measure. [ 3 ] Before turning to the background facts, I confirm that I will use the terms “independence”, “impartiality” and “objectivity” interchangeably. In doing so, I realize the potential for nuances as highlighted in some of the authorities. For example, see Judge (formerly Professor) David M. Paciocco in “Unplugging Jukebox Testimony in an Adversarial System: Strategies for Changing the Tune on Partial Experts” (2009), 34 Queen ’s L.J. 565 - 610, at ¶ 9 to 12. However, any subtle differences with these terms are of no account in this appeal.

The same is true for the relevant converse concepts such as “partiality” and “bias”. I will use them interchangeably as well. BACKGROUND [ 4 ] This is a professional negligence case. The appellants all operate building supply stores throughout Atlantic Canada. Back in 1980, they (or their predecessors) joined forces to incorporate a bulk buying agent, namely A.W.A.R.D. Wholesalers and Retailers Distributors Limited (“AWARD”). The plan was simple. AWARD would centralize its members’ purchases to enhance their collective buying power.

This resulted in manufacturer and distributor rebates that would, in turn, be distributed to the members at a level proportional to their respective purchases. [ 5 ] AWARD retained the respondent accounting firm (and its predecessor) as its external auditors, mandated to prepare its annual financial statements. Since 1995, the respondent Burgess has been the firm’s lead audit partner on this file. This relationship continued until 2005, with the completion of the 2004 statements. [ 6 ] Then in 2006, AWARD, under a new board, retained a new accounting firm, Grant Thornton LLP, to do its 2005 statement.

This report alleged serious problems with AWARD’s books. Specifically, the appellants allege that between 1995 and 2004, rebate money had been mis-allocated by AWARD’s management and that the respondents were negligent in failing to recognize and report this in its financial statements. As a result, the appellants say they are out over $17 million, thus prompting the present action. [ 7 ] The respondents deny any wrongdoing. Instead they attribute any reporting discrepancies to the fact that Grant Thornton was engaged in a fundamentally different type of accounting exercise.

They explain in their statement of defence: ¶50 Contrary to paragraph 12 of the Further Amended Statement of Claim, WBLI/Burgess deny that there are numerous differences between the review engagement report prepared by Grant Thornton LLP (the “Grant Report”) with respect to the financial statements for the financial year ended December 31, 2005 (the “2005 Review Statements”) and the Audited Financial Statements for the financial year ended December 31, 2004 (the “2004 Audited Financial Statements”).

The review engagement was, by definition, a review of the financial statements prepared to a review standard, which was (and is) very different than an audit standard. Further, the differences between the 2005 Review Statements and the 2004 Audited Financial Statements are mainly that: (

a) the 2005 Review Statements were prepared on a liquidation basis, not a going concern basis, as AWARD was in the process of winding up; and (

b) each addressed different financial years. [ 8 ] In due course, the respondents applied to have the action dismissed summarily. The motion included several alternative requests for relief that I need not get into for the purposes of this appeal.

[ 9 ] To defend this motion, the appellants commissioned an expert in forensic accounting, namely Susan Dorothy MacMillan. She too is a partner at Grant Thornton. She reviewed all the relevant materials, including the documents filed in the action. Her report, supporting the appellants’ position, was filed with the court by way of an affidavit (as opposed to the conventional format prescribed by our Civil Procedure Rules ). [ 10 ] The respondents then applied by way of preliminary motion to have this report expunged from the record. In a nutshell, they assert the following.

This action comes down to a battle between two accounting firms and how each approached their assigned tasks. Ms. MacMillan’s firm is therefore one of the combatants and could well be exposed to its own liability should its approach not be accepted by the court. In fact, as a Grant Thorton partner, Ms. MacMillan could be personally liable. Therefore, Ms. MacMillan could never be viewed as an impartial expert witness when she has a direct financial stake in the outcome of the case. [ 11 ] Justice Arthur W. D.

Pickup of the Supreme Court shared the respondents’ concern and expunged the report (thereby preventing Ms. MacMillan from offering expert evidence in the

summary judgement motion). His decision is reported at 2012 NSSC 210 . Pickup J. concluded that this was one of those “clearest of cases where the reliability of the expert . . . does not meet the threshold requirements for admissibility.” Furthermore, he felt that he had sufficient evidence to make this decision by way of preliminary motion. [ 12 ] In the same preliminary motion, the respondents also sought to expunge all, or at least major portions, of an affidavit filed by one of the appellant owners (Mr.

Fred O’Hearn of Lumbermart Limited), alleging that it contained inadmissible hearsay, irrelevant assertions and/or inadmissible opinion evidence. Again the judge agreed and expunged that affidavit from the record as well. [ 13 ] This decision ( 2012 NSSC 210 ) has prompted the instant appeal. ISSUES AND STANDARD OF REVIEW The Grounds of Appeal [ 14 ] The appellants identify the following grounds of appeal in their factum: (

a) Pursuant to the NSCPR , Rule 38.02, and with respect to the above referred decision, a mistake in law was made in considering and applying Rule 55.04 of the NSCPR , which Rule was not in the Respondent ’s Pleadings ; thereby prejudicing the Appellant’s right to notice and to prepare a fair hearing; and, or in the alternative; (

b) With respect to the above referred decision and in reference to the Expert Opinion, a mistake in law was made in misapplying Rule 39 of the NSCPR , which rule refers to the content of the affidavit, and does not reference the credibility of the deponent, nor does it consider the substance of the evidence, thereby causing extreme prejudice to the Appellant in the

Summary Judgment Hearing; and; or in the alternative; (

c) With respect to the above referred decision and in reference to the Expert Opinion, a mistake in law was made in misapplying the test for the admissibility of expert evidence, based on independence, for the purpose of an interlocutory motion and a

Summary Judgment Hearing; and, or in the alternative; (

d) With respect to the above referred decision and in reference to the Expert Opinion, a mistake in fact and law was made in misapplying and misinterpreting the evidence of the expert, Ms. Susan MacMillan; regarding the evidence she used for the purposes of the

Summary Judgment Hearing and its impact on her independence thereby causing extreme prejudice to the Appellant in the

Summary Judgement Hearing; and, or in the alternative; (

e) With respect to the above referred decision and with reference to the Affidavit of Mr. Fred O’Hearn, that a mistake in fact and law was made in wholly striking said affidavit, pursuant to NSCPR , Rule 39, thereby prejudicing the Appellant in the

Summary Judgment Hearing.

[15] However, because this is an interlocutory appeal, the appellants must first obtain leave to appeal. See: the Judicature Act,R.S.N.S. 1989, c. 240, s. 40. Thus they must establish that these grounds at least raise an “arguable issue” for us to consider them further.See: Hartling v. Nova Scotia (Attorney General), 2009 NSCA 130 at ¶ 135-137. [16] In my view, grounds (

a) and (

e) above fail to meet the “arguable issue” threshold. For example, by ground (

a) the appellantschallenge the judge’s reference in his analysis to Civil Procedure Rule 55. This provision covers the use of expert evidence and directs allproposed experts to file a report in a prescribed format. Here, as noted, the appellants simply filed an affidavit setting out Ms.MacMillan’s opinion. Therefore, the respondents sought relief under Civil Procedure Rule 39, which covers the use of affidavitevidence. In the course of his analysis, the judge considered whether Rule 55 was at play. He ultimately concluded that it was not andproceeded to resolve the matter under Rule 39.

Thus Rule 55 played no role in this matter and simply because the judge alluded to it(presumably out of an abundance of caution) does not make it an arguable issue on appeal. [17] Likewise there is no potential to ground (

e) above. The O’Hearn affidavit was rife with inadmissible hearsay, innuendo andopinion evidence that the judge properly expunged, leaving nothing relevant or discernable. There is no arguable issue to this ground ofappeal. [18] The remaining three grounds collectively challenge the judge’s decision, on a preliminary motion, to render an expert’s opinioninadmissible as a result of alleged bias. As noted, this is an exceptional form of relief. Therefore, in my view, leave ought to be grantedbut only on that one issue.

The Appropriate Standard of Review [19] Since this is an interlocutory appeal of a discretionary order without a terminating effect, we would intervene only in the faceof an error in legal principle or a patent injustice. See: Aliant Inc. v. Ellph.com, 2012 NSCA 89 at ¶ 7. [20] Here, the legal principles involve the extent to which a proposed expert must be seen to be impartial and the recourse open tothe court when such issues are raised. When identifying and applying such principles, the judge must be correct. See: R. v. B.G., (SCC), [1990] 2 S.C.R. 57 at ¶ 28, and R. v. Mohan, (SCC), [1994] S.C.J. 36 at ¶ 18.

At the same time, adecision to exclude evidence involves more than the correct application of legal principles. It also involves the factual findings and theexercise of discretion. In these two categories, the judgment under appeal is entitled to deference. For example, we would defer to thejudge’s factual findings, unless these reflect palpable and overriding error. See: Housen v. Nikolaisen, 2002 SCC 33 , [2002]S.C.J. 31 at ¶ 1. This would include, for example, whether the proposed expert lacked independence. See: Carmen Alfano Family Trust(Trustee of) v.

Piersanti, 2012 ONCA 297, where O’Connor A.C.J.O. offers: ¶113 An appellate court will accord deference to a trial judge's decision to exclude evidence of an expert on the basis that the proposedevidence lacks independence. On reviewing such a decision, an appellate court will look to whether the trial judge applied the properlegal principles and whether the trial judge's conclusion was supported by the evidence. Absent such an error, an appellate court will notinterfere. [21] As well, the first instance judge will often be called upon to exercise discretion when considering the pros and cons ofproposed evidence.

This cost-benefit analysis also commands deference. See: R. v. D.D., 2000 SCC 43 at ¶ 12-13. [22] This approach has been adopted by our court on numerous occasions. For example, Beveridge J.A. in Geophysical Services Inc.v. Sable Mary Seismic Inc., 2012 NSCA 33, leave to appeal to SCC denied, [2012] SCCA No. 245, observes: ¶116 Admissibility of evidence is a question of law.

A trial judge must be correct in his or her identification and application of the lawon the admissibility of evidence, but deference is afforded to trial judges with respect to issues such as discretionary rulings or factualfindings that may impact on ultimate admissibility (see R. v. West, 2010 NSCA 16). ...

[ 23 ] See also: R. v. Roach , 2011 NSCA 95 ; MacIntyre v. Cape Breton District Health Authority , 2011 NSCA 3 ; and Haché v. Lunenburg County District School Board , 2004 NSCA 46 . ANALYSIS The Use of Expert Evidence [ 24 ] Before assessing the decision under appeal, it would be helpful to first review the principles surrounding the use of expert evidence. I begin with the basics. Opinion evidence should be presumptively excluded. The reason for this is simple. Cases should be decided on the facts as perceived by the judge (or the jury) and not by what a third party may think of the facts.

The exception is when special expertise is needed to decipher the facts. Then and only then do we turn to experts. In such circumstances, the four criteria established by the Supreme Court of Canada in R. v. Mohan , supra, must be met. They are: (

a) The proffered evidence must first of all be relevant to one of the issues facing the court. This criterion engages the cost-benefit analysis discussed above where often the court must balance competing interests; (

b) The evidence must be necessary to assist the trier of fact. This involves more than being merely helpful. Instead, it must be necessary for the trier of fact to appreciate the technical issues at play; (

c) The evidence must not otherwise offend another exclusionary rule; and (

d) The proposed expert must be properly qualified to offer the opinion sought. [ 25 ] Interestingly, the Mohan criteria do not include a stand-alone requirement of independence and impartiality. However, as I will now elaborate, that has not prevented Canadian courts from inferring the same. [ 26 ] For example, the Ontario Court of Appeal in R. v. Abbey , 2009 ONCA 624 , highlighted the need for impartiality and independence by placing them under Mohan ’s relevance umbrella.

Interestingly, Doherty J.A. does so after first dividing the concept of relevance into two categories, legal and logical: ¶83 The relevance criterion for admissibility identified in Mohan refers to legal relevance. To be relevant, the evidence must not only be logically relevant but must be sufficiently probative to justify admission: see Mohan at pp. 20-21; K. (A.) at paras. 77-89; Paciocco & Stuesser at pp. 198-99. ¶84 When I speak of relevance as one of the preconditions to admissibility, I refer to logical relevance.

I think the evaluation of the probative value of the evidence mandated by the broader concept of legal relevance is best reserved for the "gatekeeper" phase of the admissibility analysis. Evidence that is relevant in the sense that it is logically relevant to a fact in issue survives to the "gatekeeper" phase where the probative value can be assessed as part of a holistic consideration of the costs and benefits associated with admitting the evidence. Evidence that does not meet the logical relevance criterion is excluded at the first stage of the inquiry: see e.g. R. v. Dimitrov

(2003), (ON CA), 68 O.R. (3d) 641 (C.A.), at para. 48, leave to appeal to S.C.C. refused (2004), [2004] S.C.C.A.No. 59, 70 O.R. (3d) xvii. ¶85 My separation of logical relevance from the cost-benefit analysis associated with legal relevance does not alter the criteria foradmissibility set down in Mohan or the underlying principles governing the admissibility inquiry.

I separate logical from legal relevancesimply to provide an approach which focuses first on the essential prerequisites to admissibility and second, on all of the factors relevantto the exercise of the trial judge's discretion in determining whether evidence that meets those preconditions should be received. ¶86 As indicated above, it was not argued that Dr. Totten's evidence did not meet the preconditions to admissibility. Nor is itsuggested that it was not logically relevant to identity, a fact in issue. The battle over the admissibility of his evidence was fought at the"gatekeeper" stage of the analysis.

At that stage, the trial judge engages in a case-specific cost-benefit analysis. ¶87 The "benefit" side of the cost-benefit evaluation requires a consideration of the probative potential of the evidence and thesignificance of the issue to which the evidence is directed. When one looks to potential probative value, one must consider the reliabilityof the evidence.

Reliability concerns reach not only the subject matter of the evidence, but also the methodology used by the proposedexpert in arriving at his or her opinion, the expert's expertise and the extent to which the expert is shown to be impartial and objective.[FN8] [Emphasis added.] [FN8] There are many civil cases in which an expert's evidence has been excluded or given no weight because of that expert's bias: seeGuy Pratte, Nadia Effendi & Jennifer Brusse, "Experts in Civil Litigation: A Retrospective on Their Role and Independence with a Viewto Possible Reforms" in The Hon. Todd L. Archibald & The Hon.

Randall Scott Echlin, Annual Review of Civil Litigation, 2008(Toronto: Thomson Carswell, 2008) 169, at pp. 182-88. See also David Paciocco, "Taking a 'Goudge' out of Bluster and Blarney: an'Evidence-Based Approach' to Expert Testimony", (2009) 13 Can. Crim. L.R. 135 at 150-153. [27] See also: United City Properties Ltd. v. Tong, 2010 BCSC 111, where Romilly J. refers to virtually all Canadian cases andacademic writings on this topic. [28] Furthermore, and central to this appeal, a proposed expert’s lack of independence may sometimes appear serious enough towarrant its exclusion from the outset.

For example, the Ontario Court of Appeal in Carmen, supra confirmed: ¶110 In most cases, the issue of whether an expert lacks independence or objectivity is addressed as a matter of weight to be attached tothe expert's evidence rather than as a matter of the admissibility. Typically, when such an attack is mounted, the court will admit theevidence and weigh it in light of the independence concerns.

Generally, admitting the evidence will not only be the path of leastresistance, but also accord with common sense and efficiency. ¶111 That said, the court retains a residual discretion to exclude the evidence of a proposed expert witness when the court is satisfiedthat the evidence is so tainted by bias or partiality as to render it of minimal or no assistance. In reaching such a conclusion, a trial judgemay take into account whether admitting the evidence would compromise the trial process by unduly protracting and complicating theproceeding: see R. v. Abbey, 2009 ONCA 624, 97 O.R. (3d) 330, at para. 91.

If a trial judge determines that the probative value of theevidence is so diminished by the independence concerns, then he or she has a discretion to exclude the evidence. [Emphasis added.] [29] There are also several trial level decisions supporting this proposition. Goepel J. in Beazley v. Suzuki Motor Corp., 2010 BCSC480, highlights several examples and in the process attempts to reconcile when such evidence will be ruled inadmissible and when it willsimply be left as a question of weight:

¶20 Canadian courts appear to have taken different positions on the issue of whether an expert witness' bias or perceived bias willdisqualify him or her from giving evidence at trial. Some courts have held that for expert evidence to be admissible, the expert must beseen to be absolutely neutral and objective. Other courts have concluded that a lack of objectivity, neutrality and independence arematters that only impact the weight to be afforded that expert. Romilly J. in United City Properties Ltd. v.

Tong, 2010 BCSC 111 atparas. 35-68, has exhaustively reviewed the jurisprudence. ¶21 The cases are not easily reconciled. Where there is a personal relationship between the proposed expert and the party, where theexpert has been personally involved in the subject matter of the litigation or where the expert has a personal interest in the outcome, theexpert has not been allowed to testify. Examples of such cases are Fellowes, McNeil v. Kansa General International Insurance Co.(1998), (ON SC), 40 O.R. (3d) 456 (Gen. Div.); Royal Trust Corporation of Canada v. Fisherman (2000), (ON SC), 49 O.R. (3d) 187 (Sup. Ct.

J.); Bank of Montreal v. Citak, (QC CQ), [2001] O.J. No. 1096(Sup. Ct. J.); and Kirby Lowbed Services Ltd. v. Bank of Nova Scotia, 2003 BCSC 617. In cases where the relationship between theexpert and the party is more institutional in nature, the evidence has been admitted subject to weight. Examples of such cases are R. v.Klassen, 2003 MBQB 253 and R. v. Inco Ltd. (2006), (ON SC), 80 O.R. (3d) 594 (Sup. Ct. J.). [30] Academic writing is also instructive.

Here again the same theme emerges – allegations of bias are most often left as a questionof weight for the trier of fact but, where the allegations of bias are serious enough and the lack of objectivity is obvious enough, theevidence should be excluded at the outset. For example, Judge Paciocco, in Jukebox Testimony, supra, offers this: ¶39 Should the law attempt to exclude biased expert evidence, or admit it and discount it?

Certainly, if the bias is profound enoughthat the expert witness will probably be unable to discharge the obligation to the court or tribunal to be objective and impartial, and ifthat bias is capable of being identified efficiently before the witness has testified, the evidence should be excluded.

Otherwise, bias orpartiality should affect the weight the evidence is to receive. [31] When struggling to reconcile this approach with Mohan’s silence, Judge Paciocco, like Doherty J.A. in Abbey, would park therequirement for objectivity under the relevance criterion: ¶43 The Mohan test is not well designed to cope with bias, partiality or influence. At no stage of the Mohan test do courts ask, "Is thistestimony affected by bias or partiality?" Its first requirement, the necessity component, really has little to do with bias.

Necessity looksat the subject matter being testified to and at whether the trier of fact knows enough about that subject matter to go it alone. It is arguablethat the more extreme form that the necessity test was given in D.D. would accommodate a bias inquiry. According to D.D., a courtshould ask the broad question of whether the evidence is important enough to warrant the risks its admission will present, arguablyincluding the prospect of bias. Even so interpreted, necessity is not a natural "bias meter": it gives no dedicated focus to partiality.

Whereit does factor bias in, the necessity standard measures the risk of bias solely against the need for the evidence, rather than against all ofthose factors favouring admission. Similarly, in its conventional application, the "expert qualification" component of Mohan looks at theknowledge of the expert, not at conscious or unconscious influences affecting the expert. ¶44 Mohan's prohibition on experts including otherwise inadmissible information in their reports or testimony does not address biaseither.

This prohibition will not cause the exclusion of biased testimony, because there is no general rule of evidence that makes biasedtestimony inadmissible; the law of evidence treats bias, interest and corruption as matters going to the weight of the evidence. ¶45 The component of the conventional Mohan test that seems on its face to be most promising is the "relevance" inquiry, because itincludes a cost-benefit analysis and it is the foundation for the threshold reliability inquiry that Daubert requires and Bernsteinreferences.

Although reliability should be a broad-ranging concern in qualifying expert evidence, it has been the practice of courts toapply the threshold reliability inquiry to the reliability of the scientific theory or method, and not to the reliability of the witness.Moreover, the current practice is to confine dedicated inquiries into reliability to cases where novel science is offered or where afoundation is presented raising new concerns about the reliability of a previously trusted scientific technique.

As a result, the Mohan testdoes not serve as an effective surrogate test for identifying evidence rendered unreliable by bias, partiality or influence. [32] In light of all the above, it is clear to me that courts retain a residual discretion to exclude expert evidence on account ofperceived bias. The more challenging question, however, is when this remedy should be applied. Here I return to two authorities citedabove for guidance.

For example, as noted in Carmen, supra, O’Connor A.C.J.O. at ¶ 111 suggests that such orders should be reservedfor those cases where “the evidence is so tainted by bias or partiality as to render it of minimum or no assistance”. Then Judge Pacioccooffers a two-step analysis that would, (

a) put the burden on the moving party to establish (on the balance of probabilities) “a realistic

concern that the witness is biased”, and (

b) would see it excluded only if “it is probable that the expert will be unable to present expert testimony independently and impartially”: ¶52 Balance of probabilities is the ordinary standard for admissibility imposed by the law of evidence. This is a fitting threshold to use for excluding expert evidence, for two reasons. For one, it is the familiar and ordinary standard of exclusion; for another, where actual bias is probable, the risk of admitting the expert testimony will have become too great to run.

To tackle expert bias or partiality sensibly, a two-stage approach should therefore be adopted: - Since experts are presumed to be impartial, the admissibility inquiry need not concern questions of independence and partiality unless the party opposing admissibility shows there to be a realistic concern that the witness is biased. - Even where a realistic potential for bias has been demonstrated, the testimony of expert witnesses should be admitted unless it is probable that the expert will be unable to present the expert testimony independently and impartially. ¶53 In the result, in most cases bias, interest and influence would be treated as they should be: as matters affecting the weight to be given to the expert evidence. [ 33 ] As I will now explain, the judge in this case was on solid ground by either approach.

The Decision Under Appeal [ 34 ] With this backdrop, I turn to the judge’s decision. [ 35 ] At the outset I would say that Justice Pickup produced a careful and comprehensive decision. In fact, as his first issue, he astutely questioned whether he could even grant the relief requested: ¶66 This motion raises three issues: 1) Can a motions judge strike an expert's affidavit/report prior to trial on the basis that the affidavit is not independent and unbiased? 2) Should such a motion be brought under Rule 39 or Rule 55? 3) Should Ms. MacMillan's affidavit be struck?

Issues 1 and 2 are interrelated and will be dealt with together. [Emphasis added] [ 36 ] Furthermore, the judge well understood the appellants’ position, namely that instead of ruling the evidence inadmissible, any concerns should simply be a question of weight: ¶69 The plaintiffs argue that Rule 39 cannot be used to strike an expert's opinion on the basis of a lack of independence or bias. The plaintiffs contend that "admissibility" in Rule 39 is limited to submissions that are not appropriate for an affidavit, such as hearsay or

irrelevance. ¶70 In the alternative, the plaintiffs contend that Ms. MacMillan's affidavit meets the threshold requirements for admissibility, and anyconcerns that exist regarding independence and impartiality go only to weight. The plaintiffs cite R. v. Transport

(1973) Ltee, [2002]O.J. No. 3286, 2002 CarswellOnt 2768 (Ont. Ct. J.), for the proposition that an expert's affiliation with a party does not disqualify his/herevidence. The plaintiffs submit that the degree of affiliation between Ms. MacMillan and her partners at Kentville Grant Thornton doesnot disqualify her evidence. They further submit that Ms.

MacMillan's affidavit does not contravene her profession's standards forconflicts because Kentville Grant Thornton was not doing work for AWARD contemporaneous to the work conducted by Ms.MacMillan. [37] As noted above, the judge was also careful to make sure that the motion proceeded under the correct Rule in light of theappellants’ unusual decision to file the report by way of an affidavit under Rule 39: ¶71 Can a motions judge strike an expert's affidavit/report prior to trial on the basis that the affidavit/report is not independent andunbiased?

Should such a motion be brought under Rule 39 or Rule 55? ¶72 There are a number factors that complicate the analysis of the issues that are raised in this case. Firstly, counsel for both partiesare not from Nova Scotia and do not practice regularly under our Civil Procedure Rules. Perhaps as a result, their submissions tended tofocus on the legal question of whether Ms. MacMillan's evidence was admissible and the factual question of whether she is independentand impartial.

Counsels' submissions did not focus on whether the Rules permit such an affidavit to be struck at this stage of theproceeding by a motions judge. ¶73 Secondly, the normal practice in this court is for an expert's opinion to be in the form of a report which is put before the court asan exhibit to a short affidavit by the expert. It is not the normal practice, as happened in this case, for an expert's opinion to be containedentirely in an affidavit.

As a result, the case law has tended to focus on challenging an expert's report and not an expert's affidavit; theinterrelationship between Rule 39 and Rule 55 has not been raised in any reported decision. ¶74 Lastly, the practice in this court has been to address issues with expert opinions before the trial judge and not on interlocutorymotions. This does not necessarily mean that the Rules exclude such motions, but there is a paucity of cases dealing with preliminarychallenges to an expert's opinion evidence. ¶75 There are two Rules relevant to this motion, Rule 39 and Rule 55.

Rule 39 allows a party to use affidavit evidence subject toadmissibility. Rule 39.04, which was cited earlier, provides a mechanism for striking part or all of an affidavit. [38] The judge too was well aware of the purpose of expert evidence and, in my view, correctly identified the need forindependence and impartiality, a point the appellants conceded: ¶80 Before turning to an

interpretation and applications of Rules 39 and 55 in the context of this case, it is helpful to be reminded ofthe purpose, and test for admissibility, of expert evidence. The purpose of expert evidence is to assist the trier of fact in the search for thetruth by providing an opinion on a material issue that the trier of fact would otherwise not be able to assess. In R. v.

Mohan, (SCC), [1994] 2 S.C.R. 9, the Supreme Court of Canada established four factors for determining the admissibility of experttestimony: 1) relevance 2) necessity in assisting the trier of fact 3) the absence of any exclusionary rule and 4) a properly qualifiedexpert. ¶81 The author of Expert Evidence, 2nd ed (Markham, ON: LexisNexis, 2009) at 257-264 suggests a slightly broader framework fordetermining admissibility: 1) What is the opinion?

2) Is there any exclusionary rule? 3) Is the witness a properly qualified expert? 4) Is the witness reliable? 5) What is the probative value of the evidence? 6) What is the prejudicial effect of the evidence? ¶82 From these admissibility requirements it can be seen that there are three broad categories on which expert evidence can be attacked. There are the standard attacks that can be made on any affidavit, as outlined in the Waverley decision, such as the assertion that the evidence contains hearsay or irrelevant statements. There are also attacks that are specific to expert opinion evidence.

These include challenges to the evidence itself and challenges to the person proffering the evidence. The former challenge could be an argument that the scientific or sociological evidence proffered by the expert is too novel to be reliable.

The latter challenge could be that the expert is insufficiently independent and impartial to properly assist the court or that the expert is insufficiently qualified to proffer the evidence. . . . ¶99 There is no disagreement between the parties that in Nova Scotia an expert’s report must be, and be seen to be, independent and impartial ( Lunenburg Industrial Foundry and Engineering Ltd. v. Commercial Union Assurance Co. of Canada , 2005 NSSC 62 at para. 32 ; Tingley v. Wellington Insurance Co. , 2008 NSSC 317 at para. 16 ; Ocean v.

Economical Mutual Insurance Co. , 2010 NSSC 315 at para. 22 ). [Emphasis added] [ 39 ] The judge also correctly acknowledged his role as a “gatekeeper” mandated that he exclude expert evidence from the outset when appropriate: ¶83 In Morriscey v. Zwicker , 2001 NSCA 56 , at para. 29 , the Court of Appeal emphasized the importance of the judge as a gatekeeper for admitting expert evidence: "The judge stands as the gatekeeper to determine all issues of admissibility.

Nowhere is that more important -- or difficult -- than when considering the evidence of experts." In Morriscey, the gatekeeper was the trial judge, not a motions judge. There seems to be some disagreement in the case law about which judge is best positioned to make a determination regarding the admissibility of expert evidence. [ 40 ] Furthermore, the judge was well aware that concerns about bias are typically considered as questions of weight as opposed to admissibility.

For example, during submissions, he reminded respondents’ counsel of this, using as an example the typical RCMP expert testifying on behalf of the Crown: ... for example, RCMP officers, we get them in the drug trial coming in, experts, they work for the RCMP, they’re there for the Crown; they’re giving evidence as to, you know, the guy with the baggies and the weight scale, that this is all indications of - - of trafficking. Usually when they’re cross-examined, it goes to weight because they’re always asked about the fact that they work for the RCMP and, if, you know, - That’s similar type situation.

It’s usually a weight situation. And so what I’m saying is here, superimposed on a

summary judgment, that’s why I’m having some difficulty, and maybe you can - - as you’ve said, you’ll - - you’ll try to clear this up. ... [AB, vol. 8, p. 224] [ 41 ] As well, the judge properly sounded a note of caution when the request to exclude evidence comes by way of a preliminary motion:

¶84 In Ontario, motions judges have the discretion to strike expert evidence on an interlocutory motion, but that discretion must beexercised with caution. In Andersen v. St. Jude Medical Inc, (2002), (ON SC), 29 C.P.C. (5th) 234 (Ont. Sup. Ct. J.),the defendants in a proposed class action moved to strike an expert's report on the basis that its contents were irrelevant to the motion forcertification.

In dismissing the motion, Cullity J. held that a motions judge had discretion to grant such relief, but refused in thecircumstances of the case, stating, at para. 10 and 17: I accept that, in a clear case, parts of an affidavit may be expunged as irrelevant, or otherwise inadmissible, prior to the hearing of thecertification motion. If, in other cases, it appears at the hearing of the motion to certify that unnecessary expense and delay has beencaused by delivering affidavits that are relevant only to a trial of the action, appropriate sanctions will be available. ...

In civil cases, the court will often be entitled to admit evidence conditionally and a decision whether to deal with questions relating to theadmissibility of the contents of affidavits in advance on a motion to strike, or to defer the question to the hearing of the motion orapplication for which the evidence is tendered, must, I believe, lie in the court's discretion. Any apparent inconsistency in the authoritiesthat were cited is probably explicable on that basis. ¶85 In Harrop (Litigation Guardian of) v.

Harrop, 2010 ONCA 390 at paras. 2-3, a case dealing with a challenge to expert evidencerather than the expert, the Ontario Court of Appeal held that a motions judge has the jurisdiction to rule on admissibility, but that thisshould be done with caution: In our view, the policy considerations relevant to this issue all point to the trial judge determining this question. It avoids the risk of amultiplicity of proceedings in any given case. It ensures a full context in which the decision can be made. It avoids the risk ofpreliminary steps being taken for purely tactical reasons.

And it avoids creating different appeal rights depending on whether thedecision is made by a motion judge as an interlocutory order or the trial judge. Thus, even if a motion judge has such jurisdiction, it should be exercised only in the rarest of cases. Nothing has been shown to us to putthis case in that category. ¶86 Outside Nova Scotia, there is a line of cases that suggests attacks on the reliability of an expert, not his/her evidence, can be madeon a preliminary basis (See eg Fellowes; Bank of Montreal v. Citak, (QC CQ), [2001] O.J. No. 1096, 2001CarswellOnt 944 (Ont. Sup. Ct.

J.), though this decision was made by the appointed trial judge on a pre-trial basis; Ivaco Inc, Re, [2007]O.J. No. 2115, 2007 CarswellOnt 3320 (Ont. Sup. Ct. J.); Singer v. Schering-Plough Canada Inc., 2010 ONSC 42; Hutchingame v.Johnstone, 2006 BCSC 271). There is also a line of cases that suggest such concerns should be left to the trial judge and generallyadmitted subject to weight (See eg Loblaws Inc v. United Dominion Industries Ltd., 2007 NLTD 45; Carleton Condominium Corp No 21v. Minto Construction, [2001] O.J. No. 5124, 2001 CarswellOnt 4558 (Ont. Sup. Ct. J.), aff'd [2004] O.J.

No. 597, 2004 CarswellOnt583 (Ont. C.A.)). [42] Nonetheless, he, correctly in my view, concluded that he had the ability to make such an order in appropriate circumstances: ¶95 Lastly, a purposive analysis also supports allowing advanced rulings on the admissibility of expert evidence in certain situations.In Lawrence v. Lawrence Estate, [1997] B.C.J.

No. 1009, 1997 CarswellBC 954 (B.C.S.C.) at para. 8, the British Columbia SupremeCourt held: ... it is appreciated that a party, or indeed the parties, may wish to know whether or not an expert's report will be admitted into evidence,as soon as possible, and prior to trial. And I see no reason presently why a motion such as the present one cannot be brought prior to trial,provided all relevant trial evidence can be placed before the Chambers judge and full submissions can be made. ¶96 I am satisfied that where all relevant trial evidence can be placed before a motions judge and full submissions made, there is no

reason why an advanced ruling on admissibility of an expert's evidence cannot be given. The purpose of the Rules is for the "just, speedy, and inexpensive determination of every proceeding" (Rule 1.01). In my view, justice requires, as Cullity J. held in Andersen , that such a remedy be reserved for the clearest of cases; however, if a complete record is before the motions judge, and a clear case exists, speedy and inexpensive determinations of proceedings would be thwarted if admissibility had to wait until trial. These requirements will likely only appear when the challenge is to the reliability of the expert and not to the qualifications of his/her evidence. ¶97 In

summary, a textual, contextual, and purposive

interpretation of Rule 39 and Rule 55 supports the conclusion that a party may bring an interlocutory motion to challenge an expert's affidavit on the basis that it is inadmissible in whole or in part. [ 43 ] In

summary, the judge properly articulated the relevant legal principles surrounding the admission of expert evidence. Furthermore, as I will now explain, the judge properly applied those principles. [ 44 ] At the outset, the judge concluded that Ms. McMillan’s reliability was “so impugned that [her] evidence does not meet the threshold requirements for admissibility”. Specifically, he was struck by her acknowledgement that had she known her partners would be testifying at trial, she would have had to reconsider her retainer: ¶100 Ms.

MacMillan gave extensive testimony in direct and cross-examination regarding her retainer and the work done by her partners at Kentville Grant Thornton. It is unlikely that any more information will be available at trial regarding her independence. ¶101 In my view, the affidavit of Ms. MacMillan in this case falls well short of the requirement that expert's evidence must be seen to be independent. This is one of those clearest of cases where the reliability of the expert is so impugned that their evidence does not meet the threshold requirements for admissibility. Ms.

MacMillan admitted, in response to a hypothetical question on cross-examination, that she would have had to reconsider her retainer if she had known that one of her partners would be testifying in the trial. ... [ 45 ] The evidentiary basis for this conclusion can be found in Ms. MacMillan’s cross examination: Q. Okay.

If someone told you that the Grant Thornton and partners from the Kentville office were going to testify about the 2005 review engagement they did in this case and that evidence was going to form part of the negligence claim against WBLI would that have precluded you from being a witness in this case? A. One is, I think what, and again this is hypothetical, right? Q. Yes. A. Okay. I would, I mean, I would certainly have had to look at it in that context and which I didn’t because that was not what I was asked to do. Q. Okay. And can you answer the hypothetical? A.

Well, I mean, you’ve got to look at all the - - I’ve got - - I guess I’ve got to think about that because that was never part of the, and so would - - would I think about whether I could then be retained - - Q. Yes. A. - - to be as an expert witness?

Q. Yes. A. I think I would think - - I would have a long hard think - - thinking about that. Q. And what conclusion would you come to? A. Probably that no, I wouldn’t. [ 46 ] More importantly, the judge was satisfied that a reasonable person would see her as being in a conflict of interest and “constrained” from disagreeing with her partners: ¶102 The problem Ms. MacMillan faces is that this is not a hypothetical example. The work of Kentville Grant Thornton forms part of the plaintiffs' statement of claim and case for negligence. Interestingly, Ms.

MacMillan seems to have incorporated some of the work of the Kentville office of Grant Thornton as part of her opinion, as reflected in paras. 62 and 76 of her affidavit. The moment that work is put to the court as evidence Ms. MacMillan will be in an apparent conflict of interest. It does not matter that she might have reached the same conclusion as her partners. It also does not matter that the work was not done contemporaneously. What matters is that a reasonable observer would see that she is constrained from providing a contrary view.

A contrary view would expose her partners, and therefore herself, to the prospect of liability, regardless of whether Kentville Grant Thornton had an ongoing retainer with the plaintiffs. [ 47 ] In my view, all of these factual conclusions are amply supported by the evidence and do not reflect palpable and overriding error. [ 48 ] Therefore, in the end, the judge, reasonably in my view, exercised his discretion to strike the affidavit: ¶106 In this case, all the evidence that would be available at trial is before the court.

This is also one of those clearest of cases where the motion to strike remedy is warranted. The affidavit of Ms. MacMillan lacks the requisite independence to meet the threshold of admissibility. She is in an apparent conflict of interest in that she cannot take an opposing view to one party's advocate without exposing her partners and herself to potential liability. For this reason her opinion is not independent and her affidavit should be struck. [ 49 ] In short, by ruling this evidence inadmissible, the judge engaged in the classic cost-benefit analysis.

For example: - He properly reserved this type of relief for the “ clearest of cases ” . - He was convinced that her conflict of interest would be apparent to the reasonable person. The same reasonable person would also find her constrained from having a view different from her partners. - He was convinced that he had enough evidence to make this call at this early stage in the process. Here, he was struck by Ms.

MacMillan ’ s concession that she would have had to reconsider the retainer had she known that one of her partners would be testifying at the trial. [ 50 ] Therefore, I would not disturb this decision under either of the two tests noted above. In other words, it is clear that, on sound evidence, (

a) the judge found this proposed evidence to be “so tainted by bias or partiality as to render it of minimum or no assistance” ( Carmen ), and (

b) that it was “probable that the expert [would] be unable to present expert testimony independently and impartially” ( Jukebox Testimony ).

[ 51 ] Before concluding, let me acknowledge that the appellants have placed great emphasis on the fact that this decision was made in the context of a

summary judgement application where the merits of the case would not be tested. In other words, because they only had to establish a genuine issue for trial at this stage of the process, it would be up to the ultimate trial judge, and not this motions judge, to test the merits of this proposed expert evidence. Respectfully, as I will now elaborate, this submission confounds the test for admitting evidence with the test for

summary judgment. [ 52 ] I agree that ultimately it will be for the trial judge to assess the merits of the case. However, if the appellants wish to place evidence before the court in order to defend the respondents’

summary judgement motion, it must present admissible evidence. Proposed evidence that does not get past the admissibility gatepost is not evidence for anyone to weigh. Therefore, by correctly applying legal principles to exclude this proposed evidence, the motions judge was not delving into the merits of the case; nor was he weighing evidence. He was simply rejecting potential evidence. That is a completely separate task and the fact that he performed this task in the context of a

summary judgement application, respectfully, changes nothing. [ 53 ] In fact, the judge made this clear when appellants’ counsel cautioned the court against weighing the evidence at that stage of the proceedings: MR. MURPHY: ... And I don’t know what - - what else to say to you expect that this is turning into a decision based on - - or all of the arguments so far has been really a situation where you’re weighing the evidence, whether you think it’s credible because of where she came from. She came from Grant Thornton. THE COURT: No, we’re not - - no no, we’re not dealing with credibility.

But that’s not the grounds that the affidavit is being challenged, and I think that’s clear. It’s not credibility. It’s independence. MR. D’SILVA: My Lord, I don’t want to interrupt my friend but I do want to just reiterate the point that our argument can be made without even referring to the affidavit. ... THE COURT: Yeah, but see I think the difference is, and when you look at Paragraph 41 that you’re referring to, this isn’t a weight issue. Weight doesn’t go to, I don’t think, maybe you disagree with me but, to admissibility. Admissibility is admissibility.

And once you get it admitted, if it’s an expert opinion, once it gets in then weight can - - can deal with it. But what’s being raised here, in my view, is a fundamental issue of admissibility, so I’m not sure I would deal with it as to weight. I think I have to deal with it as to admissibility. Do you follow me what I’m saying? [ 54 ] In fact, the judge accurately noted that, without this gatekeeper function, the

summary judgement process would be open to abuse: ¶98 The ramification of not allowing a motions judge to strike such evidence, in the clearest of cases, is that the court will lose the benefit of the

summary judgment process. Unlike in Ontario, where a

summary judgment judge can assess and weigh evidence, the

summary judgment judge in Nova Scotia must take each party's evidence at face value. Thus, even expert's evidence that is clearly inadmissible can be sufficient to create the appearance of a genuine issue for trial. This runs counter to the Rules' stated purposes of speed and efficiency. Moreover, while I acknowledge that in the vast majority of cases the trial judge will be best placed to make these decisions, there are situations where the expert evidence is so offensive that a interlocutory remedy must be available.

In these situations, the ramifications of allowing the matter to proceed to trial, only to see the obvious result of the impugned evidence being struck or given no weight, far outweigh the risks of allowing a motions judge the discretion to strike the evidence on an interlocutory basis. [ 55 ] In short, it makes no difference that the judge excluded this evidence in the context of a

summary judgement application. DISPOSITION

[ 56 ] I would grant leave as noted above but would dismiss the appeal with costs on appeal of $3,000, together with reasonable disbursements to be agreed upon or taxed. MacDonald, C.J.N.S. Reasons for judgment: INTRODUCTION [ 57 ] Partial witnesses testify in courts every day. If impartiality and independence were necessary attributes for a witness, there would be no litigation. Parties, friends, family, corporate officials – all would be excluded from the witness stand. Who would be left to swear or affirm to tell the truth? How would necessary information be communicated to the judge or jury?

To ask these questions is to state the obvious: partial witnesses are the bread and butter for triers of fact. It is their job to sort out where the truth lies, at least through the lens of the appropriate onus or burden of proof. [ 58 ] For those that pretend to be impartial, the great engine of truth, cross- examination, ferrets out biases or relationships that might affect the weight of the testimony being offered. [ 59 ] In this case, the respondent convinced the motions judge that the appearance of independence was a necessary hallmark or attribute for every expert witness.

Absent meeting some undefined threshold of apparent independence, an expert witness’ proposed evidence is inadmissible. Applying this test, the motions judge found the evidence of Ms. Susan MacMillan, FCA, CFE, CFI, to be inadmissible on a

summary judgment motion. I have had the privilege of reading, in draft, the reasons of my colleague, the Chief Justice. With respect, I am unable to agree with his conclusion to dismiss the appeal and his reasons for that result. [ 60 ] In my opinion, the motions judge erred in law in finding Ms. MacMillan’s evidence inadmissible. He applied the wrong test. I would also add, even if it could be said that a judge, on

summary judgment motion, could find proposed expert opinion evidence to be inadmissible on the basis of a lack of impartiality, independence, bias, or similar label, the motions judge committed palpable and overriding error in finding such a test to have been met. I would therefore grant leave to appeal, allow the appeal and strike that part of his order that pertains to the admissibility of Ms. MacMillan’s affidavit.

BACKGROUND [ 61 ] To put the legal issues into context it is important to briefly set out the factual background to the legal dispute between the parties. [ 62 ] The appellants are independently owned building supply stores and are former shareholders and members of a federally incorporated company, Wholesale and Retail Distribution Limited, commonly known as AWARD. [ 63 ] AWARD was incorporated to act as a buying agent for its members. Its mandate was to centralize purchasing. AWARD earned rebates from manufacturers and distributors based on volume.

The rebates were to be distributed to each shareholder based on their respective purchases. AWARD paid the suppliers. Each member was then supposed to reimburse AWARD. Because of the obvious risk in such an arrangement, each member had to demonstrate its financial health. Irrevocable letters of credit were required before a retailer could become a member of and a shareholder in AWARD.

[ 64 ] Brian Burgess is a chartered accountant. He is the principal in the firm WBLI Chartered Accountants, and from the inception of AWARD, the partner in charge of providing accounting, audit and other services for that company. [ 65 ] AWARD operated with apparent success from its incorporation in 1980 until 2005. Despite the financial safeguards that were supposed to be in place, AWARD failed. Some of its members had not paid AWARD for their purchases. Demands were made on its shareholders to make up the deficiency.

The total loss claimed by the appellants in terms of rebates not distributed and monies paid by them on dissolution amounted to over $15 million. [ 66 ] The appellants sued WBLI and Mr. Burgess for their claimed losses. The basis of the action was that Mr. Burgess, as external auditor, owed certain duties, he breached those duties, causing the appellants damage. WBLI and Mr.

Burgess denied owing any duty to the shareholders of AWARD, and in any event, acted appropriately as independent external auditors and did not breach the requisite standard of care in doing their work. [ 67 ] On August 12, 2010 the defendants filed a motion seeking security for costs and a variety of other remedies. One was a request for

summary judgment, that is, a dismissal of the entire claim. It was supported by a detailed affidavit from Mr. Burgess denying any deviation from professional accounting standards. [ 68 ] In response, the appellants filed two affidavits. One was from Fred O’Hearn. Mr. O’Hearn is the principal of one of the appellants, Lumbermart Ltd. The other affidavit was from Ms. MacMillan, sworn September 16, 2010. Her affidavit set out: her qualifications, terms of retainer, a

summary of her findings; details of her opinion of the ways that she believed the defendants had failed to maintain independence from the management of AWARD, and had departed from Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS). Her opinion covered the years 1993 to the end of December 2004. I will add details about her opinion later where necessary. [ 69 ] The defendants responded. They filed a competing expert’s affidavit from Jim Mucilli, sworn November 20, 2010, disputing that the defendants had failed to maintain independence or meet GAAP and GAAS. For reasons that are not entirely clear, the

summary judgment motion was not scheduled to be heard until March 26 and 27, 2012. The parties filed detailed briefs for the motion. [ 70 ] The motion for

summary judgment was not heard then, and remains unheard. Instead, the defendants brought a motion to strike the affidavits of Mr. O’Hearn and Ms. MacMillan. This motion was heard by the Honourable Justice Arthur Pickup on the March 2012 dates. Ms. MacMillan was cross-examined. Justice Pickup reserved his decision. In written reasons of June 1, 2012, he concluded that the O’Hearn affidavit should be struck as being fundamentally defective. [ 71 ] With respect to the affidavit of Ms.

MacMillan, Justice Pickup found that for an expert’s report to be admissible, it must be, and be seen to be, independent and impartial. In his view, the opinion by Ms. MacMillan fell well short of the requirement of being seen to be independent. Her affidavit was also excluded. [ 72 ] The appellants seek leave to appeal, and if granted, appeal from the order that struck the affidavits of Mr. O’Hearn and Ms. MacMillan.

I agree with the Chief Justice about the tests to be applied by this Court on the question of leave to appeal, and with respect to the standard of review on an interlocutory appeal. [ 73 ] I also agree with my colleague that leave to appeal should be denied with respect to the appellants’ complaints that the motions judge committed reversible error in relying on Civil Procedure Rule 55.04, and in striking the O’Hearn affidavit. [ 74 ] My colleague would grant leave on the complaint that the motions judge erred in excluding Ms.

MacMillan’s affidavit, but dismiss the appeal on the basis that the motions judge articulated and applied the correct legal principles, and made no palpable and overriding error. [ 75 ] As set out earlier, I must respectfully disagree. The motions judge adopted a legal test unsupported by the authorities or policy. I am also of the view that he committed palpable and overriding error in how he applied the test he did articulate.

DID THE MOTIONS JUDGE ARTICULATE AND APPLY THE CORRECT LEGAL TEST? [ 76 ] It is the common law that governs the admissibility of expert evidence. The principles are uncontroversial. They were authoritatively settled in the decision of the Supreme Court of Canada in R. v. Mohan [1] . A party proposing to call expert evidence must satisfy four criteria: relevance; necessity in assisting the trier of fact; the absence of any exclusionary rule; and a properly qualified expert.

There is no suggestion in these criteria that a party must also demonstrate that the proposed expert satisfies some additional criteria about being independent, objective, free from bias or appearance thereof. Nonetheless, trial judges have a discretion to exclude proffered expert opinion evidence if, on a cost-benefit analysis, the potential prejudicial effect outweighs its probative value (see Sopinka, Lederman & Bryant, The Law of Evidence in Canada , 3rd ed. (Toronto: LexisNexis, 2009) at paras. 12.104-112); and the discussion by Doherty J.A. in R. v.

Abbey at paras. 75-96 ). [ 77 ] Here the motions judge recognized that to determine admissibility he had to apply common law principles (paras. 80, 94). He also recognized that normally a ruling on admissibility would be made by the trial judge, but to protect the integrity of the

summary judgment process, he reasoned that he had the jurisdiction to make an interlocutory ruling where the expert evidence is so offensive that a remedy must be available (para. 98). [ 78 ] Justice Pickup found this was such a case. I have no difficulty with the general notion that a motions judge has the jurisdiction to make a ruling on the admissibility of evidence that is being sought to be introduced at the hearing of a motion. But here the motions judge did not apply the correct legal test for the admission of expert opinion evidence. It is clearly set out in R. v.

Mohan . [ 79 ] The essence of the motions judge’s decision is found in two key paragraphs (99 and 101). He said that to be admissible an expert’s report “must be, and be seen to be independent and impartial” (para. 99). [ 80 ] I will consider in more detail later the reasons he gave for his conclusion; for now it is sufficient to simply quote it: [101] In my view, the affidavit of Ms. MacMillan in this case falls well short of the requirement that expert's evidence must be seen to be independent .

This is one of those clearest of cases where the reliability of the expert is so impugned that their evidence does not meet the threshold requirements for admissibility. [my emphasis] [ 81 ] I know of no binding or persuasive authority that sets such a standard for admission of expert evidence. It is not the law. The motions judge said that the parties agreed that an expert’s report must be, and be seen to be independent and impartial (para. 99). It is not at all clear to me that the appellants agreed this was the test.

In any event, the motions judge cited three cases for the test he applied: Lunenburg Industrial Foundry and Engineering Ltd v. Commercial Union Assurance Co. of Canada , 2005 NSSC 62 at para. 32 ; Ocean v. Economical Mutual Insurance Co. , 2010 NSSC 315 at para. 22 ; Tingley v. Wellington Insurance , 2008 NSSC 317 at para. 16 . I will now turn to these cases to illustrate that they do not support the test articulated and applied by the motions judge. [ 82 ] In Lunenburg v. Commercial Union, an insured and two insurers disputed who was responsible, under insurance policies, for losses suffered by Lunenburg.

The trial judge was Warner J. One of the insurers sought to introduce opinion evidence from a semi-retired insurance executive on issues surrounding the

interpretation of the insurance contracts. Justice Warner ruled the opinion evidence inadmissible. He did so by applying the Mohan criteria, finding that the evidence was not necessary (para. 30) and that the witness was not a properly qualified expert (para. 33). No mention was made of a need for a party to establish that a proffered expert must be ‘seen to be independent’. [ 83 ] Justice Warner did cite (at para. 32) the case of “ The Ikarian Reefer ” [1993] 2 Lloyd’s Rep 68 (Q.B.D.) for the proposition that experts must demonstrate independence and objectivity in forming and tendering their opinions.

I will discuss this case later. [ 84 ] In Ocean v. Economical Mutual there is no mention of a need to be ‘seen to be independent’. The plaintiff authored two

“expert reports”. One was in excess of 150 pages. The second was in excess of 5,000. Smith A.C.J. was the scheduled trial judge. She heard a motion to strike or exclude the reports, or to at least have them comply with the Civil Procedure Rules . Ms. Ocean’s first report suggested that she suffered from Post-Traumatic Stress Disorder. The second report set out affidavits of others, legal arguments and submissions from blogs. [ 85 ] Ms. Ocean’s qualifications to be an expert in anything were doubtful to say the least. The only claims she made to an expertise were as a “researcher”, or as an “expert on her life”.

Associate Chief Justice Smith ruled that the “reports” were not expert’s reports and not admissible. Smith A.C.J. added that, “An expert witness is expected to be objective and independent of the litigation” (para. 22). Since Ms. Ocean was the plaintiff, she also failed on that score. [ 86 ] In Tingley v. Wellington Insurance the plaintiffs sought admission of file materials and reports written by six physicians without calling them as witnesses. There was no issue about any of these physicians being, or appearing to be, objective and independent.

The plaintiff argued the documents were admissible as business records under the common law or by statute or under the principled exception to hearsay. MacAdam J. ruled the materials admissible pursuant to the Evidence Act , and at common law, as an exception to the hearsay rule, but he would not permit admission of their opinions unless the witnesses testified (para. 40). [ 87 ] The defendant had argued that Civil Procedure Rule 31 (then in force) gave them the right to cross-examine the physicians on their opinions. Justice MacAdam agreed.

In the course of coming to this conclusion, he cited a number of cases to say that the ability to cross-examine is integral to the court’s ability to adequately assess an expert’s opinion. This is undoubtedly correct. Justice MacAdam cited the same case as Warner J. in Lunenburg v. Commercial Union, The Ikarian Reefer , [1993] 2 Lloyd’s Rep 68 (Q.B.D.), and quoted some of the comments made by the trial judge in that case, Cresswell J. Justice MacAdam quoted his reasons as follows: The duties and responsibilities of expert witnesses in civil cases include the following: 1.

Expert evidence presented to the court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation ... . 2. An expert witness should provide independent assistance to the court by way of objective unbiased opinion in relation to matters within his expertise ... . An expert witness in the High Court should never assume the role of an advocate. 3. An expert witness should state the facts or assumptions upon which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion ... . 4.

An expert witness should make it clear when a particular question or issue falls outside his expertise ... . [my emphasis] [ 88 ] I have no difficulty with most of the general observations by Justice Cresswell about an expert’s duties, but it must be stressed that they are merely that – general observations.

They are no substitute for the proper application of the common law criteria for admissibility of expert opinion evidence. [ 89 ] The one observation made by Cresswell J. that, with respect, I find problematic, and which has caused the problem here, is his comment that an expert must be seen to be independent. This was the bar to admission announced by Justice Pickup. Where did this come from? [ 90 ] The case of The Ikarian Reefer had nothing to do with the admissibility of expert opinion evidence. The ship, the Ikarian Reefer, ran aground. The next day there was a fire.

The insurers refused to pay, claiming the fire was deliberately set. The trial lasted 87 days. There were many experts. Cresswell J. was of the view that a misunderstanding on the part of some of the experts about their duties and responsibilities contributed to the length of trial. He set out seven paragraphs describing what he viewed as an expert’s duty

or responsibility. Only two are germane to our discussion. I will quote in full those two paragraphs (p. 81): The duties and responsibilities of expert witnesses in civil cases include the following: 1. Expert evidence presented to the Court should, and should be seen to be, the independent product of the expert uninfluenced as to formor content by the exigencies of litigation (Whitehouse v. Jordan, [1981] 1 W.L.R. 246 at p. 256, per Lord Wilberforce). 2.

An expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matterswithin his expertise (see Polivitte Ltd. v. Commercial Union Assurance Co. Plc., [1987] 1 Lloyd's Rep. 379 at p. 386 per Mr. JusticeGarland and Re J. [1990] F.C.R. 193 per Mr. Justice Cazalet). An expert witness in the High Court should never assume the role of an advocate.[2] [91] As is seen in this quote, Justice Cresswell cites Lord Wilberforce of the House of Lords in Whitehouse v. Jordan for theproposition that an expert should be, and should be seen to be, independent.

Legal reasoning from Lord Wilberforce would, of course,ordinarily be accorded considerable weight. But what was it he actually said, and in what context? [92] Whitehouse v. Jordan, [1981] 1 All E.R. 267 was a case about medical negligence. Mr. Jordan was Senior Registrar at ahospital and in charge of the delivery of baby boy. The boy suffered brain damage. Experts testified for and against the claim Mr.Jordan breached requisite standard of care. [93] The plaintiff was successful at trial. The Court of Appeal reversed, finding negligence had not been proven. The House ofLords upheld that result.

There were five judgments written by the Law Lords. Lord Wilberforce made one comment concerning expertevidence. It was about the apparent degree of consultation between expert witnesses and counsel. He wrote this: One final word. I have to say that I feel some concern as to the manner in which part of the expert evidence called for the plaintiff cameto be organised. This matter was discussed in the Court of Appeal and commented on by the Master of the Rolls.

While some degree ofconsultation between experts and legal advisers is entirely proper, it is necessary that expert evidence presented to the courtshould be, and should be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigenciesof litigation. To the extent that it is not, the evidence is likely to be not only incorrect but self defeating.

I would dismiss the appeal. [my emphasis] [94] Of the four other Law Lords, only one (Lord Fraser of Tullybelton), expressed agreement with what he referred to as LordWilberforce’s “observation” about “the organization of the expert evidence” from the plaintiff. [95] I can also agree with Lord Wilberforce’s observation for this simple reason: what party wants their evidence, expert orotherwise, tainted by even an appearance of not being independent? To do so invites the risk a trier of fact may find it unpersuasive.

Butthat general observation does not translate into a stand-alone ground to throw otherwise admissible expert evidence out the window. [96] The notion of requiring an expert’s evidence to be, and to be seen to be, independent and impartial is to liken an expert to ajudicial decision maker. Such a test is strongly reminiscent of the famous maxim of Lord Hewart C.J. : “[it] is of fundamentalimportance that justice should not only be done, but should manifestly and undoubtedly be seen to be done” (The King v. Sussex Justices,Ex parte McCarthy, [1924] 1 K.B. 256, at p. 259).

It is of course this rationale that informs the test for reasonable apprehension of biasand potential disqualification of a decision maker, or subsequent nullification of a decision tainted by it (see: R. v. S. (R.D.), (SCC), [1997] 3 S.C.R. 484). However, I fail to see how a reasonable apprehension that an expert may not be independent orimpartial can play a role in a judge, acting as a gatekeeper, to exclude evidence on that basis. Such an approach is unsupported byprinciple or authority.

[ 97 ] It is easy to see that the concepts of reasonable apprehension of bias and lack of independence are close cousins, if not siblings, or perhaps even twins. Neither requires proof or a finding of actual bias or lack partiality; all that is needed is the existence of a relationship or other circumstances that raise the concern of favouritism for one side or the other. [ 98 ] My colleague’s reasons presuppose that the motions judge here made a determination that the proffered evidence of Ms. MacMillan lacked some undisclosed degree of independence.

With respect, I cannot agree. [ 99 ] I earlier quoted extracts from the reasons by the motions judge where he expressly said Ms. MacMillan’s evidence fell short of the requirement that the evidence of experts “must be seen to be independent”. The motions judge explained his views, repeating his appearance of lack of independence analysis: [102] The problem Ms. MacMillan faces is that this is not a hypothetical example. The work of Kentville Grant Thornton forms part of the plaintiffs' statement of claim and case for negligence. Interestingly, Ms.

MacMillan seems to have incorporated some of the work of the Kentville office of Grant Thornton as part of her opinion, as reflected in paras. 62 and 76 of her affidavit. The moment that work is put to the court as evidence Ms. MacMillan will be in an apparent conflict of interest . It does not matter that she might have reached the same conclusion as her partners. It also does not matter that the work was not done contemporaneously. What matters is that a reasonable observer would see that she is constrained from providing a contrary view .

A contrary view would expose her partners, and therefore herself, to the prospect of liability, regardless of whether Kentville Grant Thornton had an ongoing retainer with the plaintiffs. [my emphasis] [ 100 ] All of the motions judge’s analysis is focussed on the appearance of a lack of independence. My colleague’s reasons do not address the actual test used by the motions judge. For the reasons already outlined, the motions judge used the wrong legal test. [ 101 ] Even if we assume, as it seems my colleague has done, that the motions judge decided Ms.

MacMillan lacked the requisite, but uncertain degree of independence or impartiality, does this make a difference? In these circumstances the answer is yes, and no. [ 102 ] Yes, because the motions judge made no finding that Ms. MacMillan was not impartial. He could hardly do so since the respondents specifically conceded that they did not allege that she was biassed. They made that clear before they cross-examined Ms. MacMillan.

Nothing changed following that examination. [ 103 ] No, because in these circumstances the case law does not support exclusion of otherwise admissible expert evidence based on a demonstration of a lack of independence. My colleague says he uses the terms “independence”, “impartiality” and “objectivity” interchangeably (¶ 3). He acknowledges, as explored by Judge Paciocco, that there are differences in these terms, but labels them as subtle and of no account in this case or in any given case. I am unable to agree that these differences are unimportant. I will return to this distinction later.

Before doing so, I want to mention why there is a general concern about expert evidence. [ 104 ] There has been considerable debate about the dangers of experts overstepping their proper roles and becoming advocates for the party that has retained them (see for example: McWilliams Canadian Criminal Evidence , 4th ed, loose-leaf (Aurora, Ont: Thomson Reuters Canada Ltd. 2010) (pp. 12-64.8-74); William G. Horton & Michael Mercer, The Use of Expert Witness Evidence in Civil Cases (2005), 29 Advocates’ Q. 153; Paul Michell & Renu Mandhane, “The Uncertain Duty of the Expert Witness” (2005), 42 Alta. L.

Rev. 635; David M. Paciocco,”Unplugging Jukebox Testimony in an Adversarial System: Strategies for Changing the Tune on Partial Experts” (2009), 34 Queen ’s L.J. 565). [ 105 ] This is no academic debate. The dangers are real. Seemingly solid and impartial, but flawed, forensic scientific opinion has played a prominent role in miscarriages of justice (see The Honourable Fred Kaufman, Report of the Commission on Proceedings Involving Guy Paul Morin (Toronto: Ontario Ministry of Attorney General, 1998); The Honourable Stephen T.

Goudge, Inquiry into Pediatric Forensic Pathology in Ontario: Report (Toronto: Ministry of Attorney General, 2008). [ 106 ] The need for experts to be impartial and objective in the preparation of their reports and in their testimony is no less pressing for the due administration of justice in the civil realm (see Rt. Honourable Lord Woolf, Access to Justice: Final Report to the Lord Chancellor on the civil justice system in England and Wales (Department of Constitutional Affairs, UK: July 1996), online: Department

of Constitutional Affairs http://www.dca.gov.uk/civil/final/index.htm; The Honourable Coulter A. Osborne, Civil Justice Reform Project: A

Summary of Findings & Recommendations (Toronto: Ministry of Attorney General, 2007), online: www.attorneygeneral.jus.gov.on.ca/english/about/pubs/cjrp). [ 107 ] Both reports recommended amending the rules of court to require experts to acknowledge and certify their understanding that it is their duty to assist the court, and this duty overrides any obligation to the person instructing them and paying their fees.

The Civil Procedure Rules in the United Kingdom and Ontario were revised to reflect this recommendation. [ 108 ] Nova Scotia recently adopted a completely new set of rules: Nova Scotia Civil Procedure Rules . They came into force January 1, 2009. Rule 55, “Expert Opinion”, reflects the same concerns and recommendations as the Woolf and Osborne Reports: experts must, in their reports, state that they are providing an objective opinion for the assistance of the court, and apply independent judgment ( Rule 55.04).

There are other requirements, but these are the relevant ones. [ 109 ] Significantly, Rule 55.01 makes it clear that nothing in Rule 55 affects the rules of evidence that govern the admissibility of expert opinion evidence. Having said that, I do not dispute that a trial judge has the discretion, in an appropriate case, to exclude proffered expert evidence due to actual bias or partiality. Remember, it is the undisclosed lack of neutrality and independence of an expert that creates the most danger to the adjudicative proces

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