R. v. Colpitts, 2016 NSSC 219

SUPREME COURT OF NOVA SCOTIA Citation: R. v. Colpitts , 2016 NSSC 219 Date: 20160818 Docket: CRH 346068 Registry: Halifax Between: Her Majesty the Queen Applicant v. Robert Blois Colpitts and Daniel Frederick Potter Respondents MID-TRIAL RULING QUALIFICATION OF EXPERT WITNESS Judge: The Honourable Justice Kevin Coady Heard: August 3, 4, 5 and 8, 2016 Written Decision: August 18, 2016 Counsel: James Martin, Mark Covan and Scott Millar, for the Crown Robert Blois Colpitts, Self-Represented Brian H. Greenspan and Jane O’Neill, for Daniel Frederick Potter

By the Court: Introduction and Background: [1] The Respondents Robert Blois Colpitts and Daniel Frederick Potter are charged with a series of fraud allegations. The Crownalleges that between January 1, 2000 and September 13, 2001 they acted to fraudulently affect the public market price of shares ofKnowledge House Incorporated (KHI). Mr. Potter was the President/CEO of KHI, while Mr. Colpitts was legal counsel. This trial hasbeen ongoing for in excess of eighty days. [2] The Crown’s final witness is Mr.

Langley Evans, presently the manager of the Special Investigations Unit at the BritishColumbia Securities Commission. He is a Chartered Accountant. Mr. Evans has been employed as a regulator in the investmentindustry since 1984, primarily with the Vancouver Stock Exchange and then with the British Columbia Securities Commission. He hasheld positions in investigations, enforcement and regulation, both in the field and as management. [3] The Crown applied to qualify Mr. Evans as an expert capable of giving opinion evidence in the following area: Mr.

Evans will be qualified as an expert to provide opinion evidence related to the analysis and

interpretation of stock market tradingpractices and techniques utilized to artificially affect and/or maintain the price of publically-traded shares and, in particular, hasconducted an analysis of the trading practices involving the shares of Knowledge House Incorporated. Messrs. Colpitts and Potter oppose this application. They argue Mr. Evans is not a “properly qualified expert” as defined in R. v. Mohan, (SCC), [1994] 2 S.C.R. 9, and White Burgess v. Abbott (2015), S.C.C. 23. [4] Expert opinion evidence is presumptively inadmissible.

The party seeking to adduce opinion evidence bears the burden ofestablishing its admissibility on a balance of probabilities. [5] In R. v. Mohan, supra, the Supreme Court of Canada established four threshold requirements for the admissibility of expertopinion evidence. They are as follows: 1. Relevance 2. Necessity in assisting the trier of fact 3. The absence of an exclusionary rule which would otherwise render the evidence inadmissible 4.

A properly qualified expert In addition to the four threshold requirements the Court emphasized there remains a need for a “cost benefit analysis” to decide “whetherits value is worth what it cost.” The Court emphasized that “cost” in this context is not used in its traditional economic sense but rather interms of its impact on the trial process. [6] Justice Sopinka articulated how to apply the cost benefit analysis at paragraph 18: Evidence which is found to be logically relevant to a trial issue may nevertheless be excluded if its probative value is overborne by itsprejudicial effect, if it involves an inordinate amount of time which is not commensurate with its value, or if it is misleading in the sensethat its effect on the trier of fact, particularly a jury, is out of proportion to its reliability.

Subsequent Supreme Court of Canada decisions have endorsed this approach to the cost benefit analysis.

[ 7 ] The first task in this analysis is to apply the four Mohan requirements. There is no question Mr. Evans’ proposed evidence is relevant. In White Burgess v. Abbott, supra, Justice Cromwell stated that relevance at the threshold stage refers to “logical relevance”. To be logically relevant, evidence must have a tendency, as a matter of human experience and logic, to make the existence or non- existence of a fact in issue more or less likely. There is a clear connection between Mr.

Evans’ proposed evidence and the allegations contained in the indictment. [ 8 ] The necessity requirement relates to assisting the trier of fact with evidence that is outside the experience of a judge or a jury. Such evidence must be more than merely helpful, yet absolute necessity is not required. The world of stock markets touches only a small segment of our society. The industry is extremely complex. I have often stated on the record that I require assistance coping with some of the Crown’s evidence. I conclude that Mr.

Evans’ proposed testimony will be of significant assistance in my comprehension of technical aspects of the industry. [ 9 ] There is no exclusionary rule that would block the admission of Mr. Evans’ proposed evidence at either the preliminary or secondary step. [ 10 ] The “properly qualified expert” element is the most controversial in this application. White Burgess v. Abbott, supra, directs that it has two dimensions. One, the witness must be qualified to give the proposed opinion evidence.

Two, the witness must be able and willing to fulfill their duty to the Court to provide fair, objective and non-partisan assistance. [ 11 ] On the qualification side, R. v. Mohan , supra, stated the proposed expert witness must be “shown to have acquired special or peculiar knowledge through study or experience in respect to the matters on which he or she undertakes to testify.” In R. v. Dixon, [2015] O.J. No. 7106 , Justice Munroe offered the following remarks at paragraph 21: The admissibility of [expert] evidence does not depend upon the means by which that skill was acquired.

As long as the court is satisfied that the witness is sufficiently experienced in the subject-matter at issue, the court will not be concerned with whether his or her skill was derived from specific studies or by practical training, although that may affect the weight to be given to the evidence. The Defendants submit Mr. Evans’ opinions are not based entirely on his own work. They argue that his methodology is flawed and that he failed to consider materials they view as essential to his opinions.

The Defendants argue that he failed to independently investigate and adopted the materials and theories of the RCMP without question. They accuse him of tunnel vision and suggest he has become an advocate for the Crown. They argue his opinions are not reliable and, as such, are of no assistance to the trier of fact. [ 12 ] On the independence and impartiality side, White Burgess v.

Abbott, supra, commented on this requirement at paragraph 53: In my opinion, concerns related to the expert’s duty to the court and his or her willingness and capacity to comply with it are best addressed initially in the ‘qualified expert’ element of the Mohan framework. A proposed expert witness who is unable or unwilling to fulfill this duty to the court is not properly qualified to perform the role of an expert. Situating this concern in the ‘properly qualified expert’ ensures that the courts will focus expressly on the important risks associated with biased experts.

And further at paragraph 45: Following what I take to be the dominant view in the Canadian cases, I would hold that an expert’s lack of independence and impartiality goes to the admissibility of the evidence in addition to being considered in relation to the weight to be given to the evidence if admitted. That approach seems to me to be more in line with the basic structure of our law relating to expert evidence and with the importance our jurisprudence has attached to the gatekeeping role of trial judges.

Binnie J. summed up the Canadian approach well in J.-L.J.: ‘The admissibility of the expert evidence should be scrutinized at the time it is proffered, and not allowed too easy an entry on the basis of all of the frailties could go at the end of the day to weight rather than admissibility’. Mr. Evans testified he is impartial and independent of the RCMP. He stated “no one directed my outcome” and “my analysis and reports

are my independent work and not that of the RCMP.” [ 13 ] In White Burgess v. Abbott, supra, Justice Cromwell commented further at paragraphs 47 and 48: While I would not go so far as to hold that the expert’s independence and impartiality should be presumed absent challenge, the expert’s attestation or testimony recognizing and accepting the duty will generally be sufficient to establish that this threshold is met.

Once the expert attests or testifies on oath to this effect, the burden is on the party opposing the admission of the evidence to show that there is a realistic concern that the expert’s evidence should not be received because the expert is unable and/or unwilling to comply with that duty. If the opponent does so, the burden to establish on a balance of probabilities this aspect of the admissibility threshold remains on the party proposing to call the evidence. If this is not done, the evidence or those parts of it that are tainted by a lack of independence or impartiality, should be excluded.

This approach conforms to the general rule under the Mohan framework and elsewhere in the law of evidence, that the proponent of the evidence has the burden of establishing its admissibility. [ 14 ] The threshold requirement is not particularly onerous and it should be quite rare that a proposed expert’s evidence would be ruled inadmissible for failing to meet it. Justice Cromwell discusses the type of relationships that can impact on impartiality at the preliminary stage.

He states at paragraph 49: The trial judge must determine, having regard to both the particular circumstances of the proposed expert and the substance of the proposed evidence, whether the expert is able and willing to carry out his or her primary duty to the court. For example, it is the nature and extent of the interest or connection with the litigation or a party thereto which matters, not the mere fact of the interest or connection; the existence of some interest or a relationship does not automatically render the evidence of the proposed expert inadmissible.

In most cases, a mere employment relationship with the party calling the evidence will be insufficient to do so. On the other hand, a direct financial interest in the outcome of the litigation will be of more concern. The same can be said in the case of a very close familial relationship with one of the parties or situations in which the proposed expert will probably incur professional liability if his or her opinion is not accepted by the court.

Similarly, an expert who, in his or her proposed evidence or otherwise, assumes the role of an advocate for a party is clearly unwilling and/or unable to carry out the primary duty to the court. I emphasize that exclusion at the threshold stage of the analysis should occur only in very clear cases in which the proposed expert is unable or unwilling to provide the court with fair, objective and non-partisan evidence.

Anything less than clear unwillingness or inability to do so should not lead to exclusion but be taken into account in the overall weighing of costs and benefits of receiving the evidence. [ 15 ] The preliminary analysis is not assessed on an objective basis. Justice Cromwell addressed this point at paragraph 50: As discussed in the English case law, the decision as to whether an expert should be permitted to give evidence despite having an interest or connection with the litigation is a matter of fact and degree.

The concept of apparent bias is not relevant to the question of whether or not an expert witness will be unable or unwilling to fulfill its primary duty to the court. When looking at an expert’s interest or relationship with a party, the question is not whether a reasonable observer would think that the expert is not independent. The question is whether the relationship or interest results in the expert being unable or unwilling to carry out his or her primary duty to the court to provide fair, non-partisan and objective assistance.

In order to reject an expert’s proposed evidence at the initial step a Judge must have “palpable concerns” as to their independence and impartiality. [ 16 ] I will not be excluding any aspect of Mr. Evans’ proposed evidence at the preliminary stage. I am satisfied that the element of relevance has been met and there is no exclusionary rule at play. I have received submissions, supported by documentary evidence, that question the necessity element. The Defendants argue that Mr. Evans’ methodology is so flawed that I cannot rely on it.

I do not find that these submissions warrant rejection of his proposed evidence. [ 17 ] I have also received submissions, supported by documentary evidence, that question the properly qualified expert element on the basis of impartiality and lack of independence. Once again, I do not find those stated concerns warrant rejection at the preliminary stage. I do not have a realistic concern such that I would reject any aspect of Mr. Evans’ testimony on the basis of bias. After all, he has testified that he is impartial and not an advocate for the RCMP.

The Defendants have not met the onus attributed to them by White Burgess v. Abbott, supra. [ 18 ] In White Burgess v. Abbott, supra, Justice Cromwell directed that the real analysis respecting impartiality should occur at the

cost benefit stage. He stated at paragraph 2: Expert witnesses have a special duty to the court to provide fair, objective and non-partisan assistance. A proposed expert witness who is unable or unwilling to comply with this duty is not qualified to give expert opinion evidence and should not be permitted to do so. Less fundamental concerns about an expert’s independence and impartiality should be taken into account in the broader, overall weighing of the costs and benefits of receiving the evidence. In R. v.

Abbey (2009), O.N.C.A. 624, Justice Doherty affirmed this direction at Paragraph 76: The trial judge must decide whether expert evidence that meets the preconditions to admissibility is sufficiently beneficial to the trial process to warrant its admission despite the potential harm to the trial process that may flow from the admission of the expert evidence.

It seems to be settled that only those proposed experts who refuse to swear as to their impartiality, or have such a close connection to a litigant, will have their proposed evidence rejected at the preliminary stage. [ 19 ] Bias and impartiality are not water tight compartments but rather exist along a continuum. Not all kinds of bias require rejection of the proposed evidence. In White Burgess v. Abbott, supra, Justice Cromwell cited the Supreme Court of Canada’s language in Mouvement Laique Québécois v.

Saguenay (City) (2015), S.C.C. 16 at paragraph 36: For expert testimony to be admissible, more than a simple appearance of bias is necessary. The question is not whether a reasonable person would consider that the expert is independent. Rather, what must be determined is whether the expert’s lack of independence renders him or her incapable of giving an impartial opinion in the specific circumstances of the case. The fact that one party retains and compensates a proposed expert will always raise concerns.

These concerns standing alone are never sufficient to reject the proposed evidence. [ 20 ] It is always desirable that an expert should have no actual or apparent interest in the outcome of the proceedings in which he or she gives evidence. Such disinterest is not automatically a precondition to the admissibility of his or her evidence. As Justice Cromwell stated in White Burgess v.

Abbott , supra, “the decision as to whether an expert should be permitted to give evidence despite having an interest or connection with the litigation is a matter of fact and degree.” [ 21 ] A Judge’s approach to assessing proposed expert evidence at the secondary step was discussed in R. v. Smith-Wilson (2016), S.K.Q.B. 33. Justice Dawson commented at paragraph 178: If the evidence passes the threshold test for admissibility, then the court must go on to scrutinize the evidence for admissibility at the gatekeeper stage.

At this stage, the inquiry does not involve the application of the bright line rules, but instead requires an exercise of judicial discretion. The court must weigh competing considerations in the case before it to decide whether on balance those considerations favour the admissibility of the evidence. The trial judge determines whether the benefits of admitting the evidence outweigh its potential risks, considering the factors of relevance, necessity, reliability and the absence of bias. Reliability is a major consideration in the cost-benefit analysis exercise.

It encompasses elements of relevance and a properly qualified expert. [ 22 ] In R. v. Abbey, [97] O.R. (3d) 330 (Ont. C.A.) Justice Moldaver sets forth the proper approach to the cost-benefit analysis that is to occur at the secondary step. He states as follows at paragraphs 87 to 92:

87 . . . When one looks to potential probative value, one must consider the reliability of the evidence. Reliability concerns reach not only the subject matter of the evidence, but also the methodology used by the proposed expert 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. 88 Assessment of the reliability of proffered expert evidence has become the focus of much judicial attention, particularly where the expert advances what is purported to be scientific opinion: see, for example, Daubert v.

Merrell Dow Pharmaceuticals Inc., para. 12:30.20.30; Bruce D. Sales and Daniel W. Schuman, Experts in Court Reconciling Law, Science, and Professional Knowledge (Washington, D.C.: American Psychological Association, 2005). 89 In assessing the potential benefit to the trial process flowing from the admission of the evidence, the trial judge must intrude into territory customarily the exclusive domain of the jury in a criminal jury trial. The trial judge’s evaluation is not, however, the same as the jury’s ultimate assessment.

The trial judge is deciding only whether the evidence is worthy of being heard by the jury and not the ultimate question of whether the evidence should be accepted and agreed upon. 90 The “cost” side of the ledger addresses the various risks inherent in the admissibility of expert opinion evidence, described succinctly by Binnie J. in J. (J.), at para. 47 as “consumption of time, prejudice and confusion”. Clearly, the most important risk is the danger that a jury will be unable to make an effective and critical assessment of the evidence.

The complexity of the material underlying the opinion, the expert’s impressive credentials, the impenetrable jargon in which the opinion is wrapped and the cross-examiner’s inability to expose the opinion’s shortcomings may prevent an effective evaluation of the evidence by the jury.

There is a risk that a jury faced with a well- presented firm opinion may abdicate its fact-finding role on the understandable assumption that a person labelled as an expert by the trial judge knows more about his or her area of expertise than do the individual members of the jury: J. (J.), at para. 25. 91 In addition to the risk that the jury will yield its fact-finding function, expert opinion evidence can also compromise the trial process by unduly protracting and complicating proceedings.

Unnecessary and excessive resort to expert evidence can also give a distinct advantage to the party with the resources to hire the most and best experts -- often the Crown in a criminal proceeding. 92 All of the risks described above will not inevitably arise in every case where expert evidence is offered. Nor will the risks have the same force in every case. For example, in this case, I doubt that the jury would have difficulty critically evaluating Dr. Totten’s opinion.

There was nothing complex or obscure about his methodology, the material he relied on in forming his opinion or the language in which he framed and explained his opinion. As when measuring the benefits flowing from the admission of expert evidence, the trial judge as “gatekeeper” must go beyond truisms about the risks inherent in expert evidence and come to grips with those risks as they apply to the particular circumstances of the individual case. [ 23 ] The Defendants argue that Mr. Evans’ report and his proposed testimony are not the product of independent analysis. It is their view that Mr.

Evans’ report is a compilation of several other opinions. They claim that the report only advances the theories of the investigators. They claim “he just did not do the work and then applied a flawed analysis.” It is their view that he provided no analysis on the impact of the alleged manipulations on the price of KHI stock. The Defendants accept that Mr. Evans can give opinion testimony on terminology, the mechanics of the market, and the roles of various players in the industry. However, they argue his impact evidence is completely unreliable. The Defendants see Mr.

Evans as nothing more than an advocate. [ 24 ] I do not agree that Mr. Evans’ impact evidence is of such questionable quality that I would limit the scope of his evidence. He states at paragraphs 120-122 of his report: The Group’s overall margin loans increased greatly during this period. By the end of April, Group’s margin loans increased to over $4.5 million. By May, the Group’s outstanding margin loans rise to close to $7.9 million and then hover around to $8 million until later in June.

By July 31, 2000, the 540 account and Callbeck/Colpitts account are near or at the allowable limit for margin (50% and 48% respectively). Indicators of a manipulative agenda by the Group during this time period include: • the domination of the buy-side of the market by the Group accounts • the continued heavy activity of the 540 account as the nominee account

• parking stock in the Union account • orchestrated trading the FutureEd.com, 540 and Callbeck/Colpitts accounts In my opinion, the price of KHI shares would have experienced a significant decline over this same period except that KHI share pricewas maintained at an artificially high level by the activity of the Group led by the 540 account trading. No doubt the Defendants will challenge Mr. Evans’ margin account calculations. Nonetheless, he has provided his opinion and did notback away from it during an extensive cross-examination.

He advanced the reasons for his impact opinion at paragraph 132 of hisreport: In my opinion, the market price of KHI shares would have been significantly lower by August 25, 2000 without the intervention ofGroup in KHI market during this period. I base this on the general nature of the Group’s trading including: • the Group’s domination of the buy-side during most trading sessions • the apparent orchestrated trading among the group and • the high closing activity from August 18 through 23.

This activity contributed to an artificially high price for KHI and a misleading appearance of the strength of the market for KHI shares. Absent this activity, in my opinion, the KHI trading price would have been significantly lower. This is a firm opinion with significant support in the evidence. I do not find his evidence “totally unreliable”. [25] The cost benefit analysis is a discretionary exercise. It is akin to a probative versus prejudicial effect analysis. It presumes thatproposed evidence has both positive and negative consequences.

The exercise of judicial discretion ensures that the negativeconsequences do not overpower the positive consequences in such a way that fair trial rights are compromised. It must be rememberedthat expert evidence has been responsible for many miscarriages of justice. Jurisprudence in recent years has placed protections aroundexpert evidence, both at the preliminary and secondary steps. [26] The issue of relevance at the secondary step is treated somewhat differently than at the threshold step. In R. v.

Abbey, supra,Doherty, J.A. stated as follows, at paragraphs 84 and 85: When I speak of relevance as one of the precautions to admissibility, I refer to logical relevance. I think the evaluation of the probativevalue of the evidence mandated by the broader concept of legal relevance is best reserved for the ‘gatekeeper’ phase of the admissibilityanalysis. Evidence that is relevant in the sense that it is logically relevant to a fact in issue survives the ‘gatekeeper’ phase where theprobative 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, [2003] O.J. No. 5243 (C.A.), at para. 48, leave to appeal to S.C.C. refused (2004), 70O.R. (3d) xvii, [2004] S.C.C.A. No. 59. 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.

This is essentially a fraud prosecution. The Defendant’s alleged actions involved the stock market and the investment industry. Mr. Evans’ report is clearly focused on the industry and to repeat Justice Munroe’s comments in R. v. Dixon, supra : “Relevance is obvious.” [ 27 ] The element of necessity is also met at the secondary step. The evidence thus far in this trial involves institutions, terminology and practices not well understood by the non-investing community. I count myself as one of that class. The Defendants argue that the reliability of Mr.

Evans’ proposed evidence is very much in question and, as such, can be of no assistance to the trier of fact. They base this assertion on his alleged flawed methodology and his lack of impartiality. I have not found Mr. Evans’ methodology so flawed that his evidence should be found inadmissible. I have not found Mr. Evans’ alleged impartiality proven to such a degree that his evidence is unreliable. Any issue with either challenge will be a matter of weight. The evidence of Mr. Evans will clearly assist me in navigating through this challenging case.

Notwithstanding this assistance, the ultimate question will be entirely mine. [ 28 ] The Defendants’ opposition to this application is firmly rooted in the “properly qualified expert” element. Their arguments are twofold. One, it is their view Mr. Evans lacks the qualifications to testify about the impact the Defendants’ alleged manipulations had on the price of KHI stock. Two, it is their further view he lacks impartiality. [ 29 ] Putting aside Mr. Evans’ “methodology” for the moment, I find that he has the education and experience required for qualification.

He has dedicated his professional life to the regulation of stock markets and investors. He has held leadership roles in industry organizations and has been recognized as an effective regulator. Since 1984 he has held a series of increasingly senior positions at the British Columbia Securities Commission. He has been a lead investigator in several market manipulation cases. Mr. Evans is regularly required to give lectures about investigating market misconduct.

I am satisfied he has the specialized knowledge required to be qualified as requested by the Crown. [ 30 ] On the methodology side the Defendants have advanced several factors which they feel severely limit the value of Mr. Evans’ proposed evidence, especially in the area of impact on KHI stock values. The following is a

summary of the factors they feel affect Mr. Evans’ methodology: • Mr. Evans relied on reports prepared by other experts and accepted them without personal analysis. • Mr. Evans ignored available evidence that the Defendants feel is critical to his proposed opinions (orders behind the trading). • Mr. Evans did not access all of the data provided by the investigators (order ticket information and Toronto ticket reports). • Mr. Evans did not review the group’s selling activity. • Mr. Evans accepted the Match Trade Report as accurate in spite of his awareness of its shortcomings. • Mr.

Evans accepted only the emails and witness statements provided by the investigators and had no knowledge of how they were chosen. • Mr. Evans had to file an addendum to his report to correct miscalculations in his original analysis and that error resulted in material changes to the data. • Mr. Evans erred in calculations respecting the group’s margin accounts which will require recalculation. Mr. Evans was examined on each of these factors. He acknowledged his calculation errors but did not feel they would impact on his proposed testimony.

He did not accept the Defendants’ factors were necessary for his report or proposed testimony. While the Defendants challenged his methodology, Mr. Evans did not accede to their suggestions that his methodology was flawed. He firmly stood behind his work. [ 31 ] The Defendants did not call any evidence which clearly supported their view of the proper methodology. They referenced documents which they suggested were evidence of a flawed approach. Mr. Evans’ experience and studies, as set forth in his curriculum vitae, are impressive. I take the view that part of his role is to define the methodology he uses.

In the event he has erred in defining his methodology, I consider that to be a question of weight. [ 32 ] On the impartiality side, the Defendants have advanced several factors to suggest Mr. Evans is not capable of fulfilling his foremost duty to the Court. The following is a

summary of the factors they advance in support of their position:

• Mr. Evans did not receive or review any trading material other than what the RCMP provided. • Mr. Evans relied primarily on the information and data that the RCMP provided to him without checking or assessing it for accuracy (the Match Trade Report as well as several tables and charts attached to his report). • Mr. Evans did not seek additional information from the RCMP when such was warranted. [ 33 ] It is my conclusion the Defendants have failed to establish that Mr. Evans is not a properly qualified expert based on his impartiality. He came to the KHI task with little knowledge of the background.

It is the role of all proposed experts to seek instructions from a party to the litigation. These types of contact do not equate to evidence of bias sufficient to finding the opinions inadmissible. [ 34 ] In Moore v. Getahun , 2015 ONCA 55 , the Court reviewed whether a trial judge erred in law when she determined that it was improper for the Defendant’s trial counsel to review an expert’s draft report and comment on it prior to the final report.

Justice Sharpe held that communications with expert witnesses are necessary to ensure that an expert frames his report in a manner that is comprehensive and responsive to the issues in the case. He stated at paragraphs 64-66: Counsel play a crucial mediating role by explaining the legal issues to the expert witness and then by presenting complex expert evidence to the court. It is difficult to see how counsel could perform this role without engaging in communication with the expert as the report is being prepared.

Leaving the expert witness entirely to his or her own devices, or requiring all changes to be documented in a formalized written exchange, would result in an increased delay and cost in a regime already struggling to deliver justice in a timely and efficient manner. Such a rule would encourage the hiring of ‘shadow experts’ to advise counsel. There would be an incentive to jettison rather than edit and improve badly drafted reports, causing the added cost and delay.

Precluding consultation would also encourage the use of those expert witnesses who make a career of testifying in court and who are often perceived to be hired guns likely to offer partisan opinions, as these expert witnesses may require less guidance and preparation. In my respectful view, the changes suggested by the trial judge would not be in the interests of justice and would frustrate the timely and cost-effective adjudication of civil disputes. For these reasons, I reject the trial judge’s proclamation that the practice of consultation between counsel and expert witnesses to review draft reports must end.

While this authority deals specifically with retaining counsel, the same applies to the RCMP when they engaged Mr. Evans. I see nothing to support the Defendants’ view that Mr. Evans exercised tunnel vision or is in the pockets of the RCMP. No doubt there will be challenges to Mr. Evans’ impartiality during this trial, but they are not significant enough to displace his assertion that he is an independent expert well aware of his foremost obligation to the Court. [ 35 ] The cost benefit analysis is the final step in determining the status of Mr. Evans’ proposed evidence. In R. v. Abbey, supra,

(1992) Justice Doherty discussed “benefit” at paragraph 87: The ‘benefit’ side of the cost-benefit evaluation requires a consideration of the probative potential of the evidence and the significance of the issue to which the evidence is directed. When one looks to potential probative value, one must consider the reliability of the evidence. Reliability concerns reach not only the subject matter of the evidence, but also the methodology used by the proposed expert 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.

The proposed opinion evidence is clearly focused on the alleged manipulation of KHI stock prices during the period of the indictment. The evidence is reliable in that it is not encumbered by a faulty methodology and any alleged impartiality has not been established. It clearly is not perfect and more issues may arise as Mr. Evans gives his trial evidence.

However, any such concerns will go to weight. [ 36 ] Justice Sharpe discussed “cost” at paragraph 90: The ‘cost’ side of the ledger addresses the various risks inherent in the admissibility of expert opinion evidence, described succinctly by Binnie, J, in J. (J.), at para. 47 as ‘consumption of time, prejudice and confusion’. Clearly, the most important risk is the danger that a jury will be unable to make an effective and critical assessment of the evidence. The complexity of the material underlying the opinion,

the expert’s impressive credentials, the impenetrable jargon in which the opinion is wrapped and the cross-examiner’s inability to exposethe opinion’s shortcomings may prevent an effective evaluation of the evidence by the jury. There is a risk that a jury faced with a well-presented firm opinion may abdicate its fact-finding role on the understandable assumption that a person labelled as an expert by the trialjudge knows more about his or her area of expertise than do the individual members of the jury. Important to this primary concern is the fact that I am hearing this trial without a jury.

The danger of overwhelming the trier of fact isvery significantly mitigated. [37] There are very few other “costs” at play. Mr. Evans’ evidence will not extend the trial or add confusion to the proceeding. InR. v. Mohan, supra, the cost benefit analysis was paraphrased with the question “whether its value is worth what it cost”. It has value inthat it is reliable; it is relevant and of assistance to the trier of fact; and the product of an independent expert. I do not see any costsassociated with admissibility. [38] The Defendants have advanced Dulong v.

Merrill Lynch Canada (2006), (ON SC), 80 O.R. (3d) 378 andAlfano v. Piersanti, 2012 ONCA 297 in support of their position on admissibility. In the latter case Justice O’Connor stated the trialjudge erred in finding the proposed expert “based his analysis of the defence position on the theories advanced by Mr. Piersanti.” In theformer case Justice Ducharme found the proposed expert not a properly qualified expert. These are cases where discretion was broughtto bear on the particulars of the expert and the proposed opinion. Conclusion [39] The Application is allowed and Mr. Evans will be qualified as proposed.

All subsequent analysis will go to weight. Coady, J.