Kaufman v. Nova Scotia (Attorney General)

Kaufman v. Nova Scotia (Attorney General) Court Court of Appeal Date 2005-02-18 Citation 2005 NSCA 34 Docket CA 220211 Judge/Registrar/Adjudicator Cromwell, Thomas A. (Honourable Justice); Roscoe, Elizabeth A. (Honourable Justice) (CA); Bateman, Nancy J. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Kaufman v. Nova Scotia (Attorney General) - 2005 NSCA 34 - 2005-02-18 - Library Sheet Decision Content NOVA SCOTIA COURT OF APPEAL Citation: Kaufman v. Nova Scotia (Attorney General), 2005 NSCA 34 Date: 20050218 Docket: CA 220211 Registry: Halifax Between: The Honourable Fred Kaufman Appellant v. The Attorney General of Nova Scotia, representing Her Majesty the Queen in Right of the Province of Nova Scotia, Royal & Sun Alliance Insurance Company of Canada, Guardian Insurance Company of Canada, The Halifax Insurance Company, Wellington Insurance Company, General Accident Assurance Company of Canada and Quebec Assurance Company Respondents Judges: Roscoe, Bateman and Cromwell, JJ.A. Appeal Heard: December 3, 2004, in Halifax, Nova Scotia Held: Leave to appeal is granted and appeal is allowed per reasons for judgment of Cromwell, J.A.; Roscoe and Bateman, JJ.A. concurring. Counsel: Duncan R. Beveridge, Q.C., for the appellant Robert M. Purdy, Q.C., Peter M. Rogers, Dale Darling and Jacqueline Scott, for the respondent, The Attorney General of Nova Scotia W. Augustus Richardson, for the respondents, Royal & Sun Alliance Insurance Co. of Canada and Quebec Assurance Co. George W. MacDonald, Q.C. and Jane O’Neill, for the respondent, Guardian Insurance Company of Canada Daniel W. Ingersoll, for the respondent, General Accident Assurance Company of Canada. Reasons for judgment: I. Introduction: [1] This interlocutory appeal concerns the production of documents in rather unusual circumstances. [2] The Province was faced in the 1990's with claims of widespread institutional abuse. It paid out many claims and is defending others. It is also suing its insurers for indemnification and breach of their duty to defend. The insurers deny liability on various grounds, including that the Province made unauthorized admissions, unilaterally contracted settlements, operated an ADR process negligently, paid invalid claims and paid too much for valid claims. [3] In 1999, the Province launched an independent review of its response to the allegations of institutional abuse which underlie this action. The Honourable Fred Kaufman was commissioned by the Minister of Justice to investigate and, as is well known, he completed his report in 2002. He was highly critical of the government’s ADR process which paid out hundreds of claims. [4] The insurers, to assist in the preparation of their defence of the Province’s action against them, want to see all of the documents generated by Mr. Kaufman and his staff in preparation of his Report. The Province takes the position that Mr. Kaufman was its agent and therefore because it was his principal, it has the right to control these documents. The documents are therefore producible by the Province subject to relevance and privilege. [5] Mr. Kaufman, however, sees it differently. He takes the position that interview notes and other documents that may have been produced during the course of his review were not made “within the umbrella of [his] being part of the department of Justice”, that he had been assured operational independence and that, so far as legally possible, he had given assurances of confidentially to individuals who had been interviewed as part of his review. He refuses to produce this material unless ordered to do so. [6] The insurers therefore applied under Rule 20.06 to Moir, J. for an order that the Province and/or Mr. Kaufman produce all documents generated by Mr. Kaufman and his staff in preparation of his Report. The learned Chambers judge ruled that the documents should be produced by Mr. Kaufman to the Province which, in turn, subject to relevance and privilege, should produce them to the insurers. The operative parts of the judge’s order read as follows: 1. That Mr. Kaufman deliver to the Province all documents generated by him and his staff in preparation of his Report dated January 2002, entitled “Searching for Justice - An Independent Review of Nova Scotia’s Response to Reports of Institutional Abuse” to the Province; 2. That counsel for the Plaintiff, Attorney General of Nova Scotia produce to the Defendants all documents received from Mr. Kaufman that are relevant to the proceedings, subject to claims of privilege by the Plaintiff or a third party; [7] The judge held that Mr. Kaufman was an agent of the Province, that he held the documents within the ambit of that agency, that the Province “owned” the documents and that Mr. Kaufman held them subject to the control of the Province. Mr. Kaufman, therefore, is obliged to comply with the Province’s request to produce the documents to it. The Province, in turn, subject to relevance and privilege, must produce them in the litigation. In light of these conclusions, it was not necessary for the judge to decide, and he did not do so, whether production would be ordered if Mr. Kaufman were found to be a stranger to the litigation rather than, as the judge held, the agent of a party. [8] Mr. Kaufman now asks leave to appeal and, if granted, appeals the order requiring him to deliver the documents to the Province. II. Issues: [9] The appeal raises two main issues: first, did the judge err in finding that the documents are within the control of the Province because they were produced while Mr. Kaufman was its agent; and second, if the judge was wrong about that and Mr. Kaufman is a stranger to the litigation rather than the agent of a party, should he be ordered to produce the documents? III. Standard of Review: [10] The standard of appellate review on this interlocutory appeal is that the judge’s decision should not be reversed unless he applied wrong principles of law, made a palpable and overriding error of fact or his order gives rise to a patent injustice: MacKenzie v. Kutcher (2004), 220 N.S.R. (2d) 285; N.S.J. No. 6 (Q.L.) (C.A.). IV. Analysis: 1. General principles: [11] The obligation of a party to litigation, subject to the court’s discretion to order otherwise, is to produce documents “... that are or have been in [the] possession, custody or control [of the party] relating to every matter in question in the proceeding ...” (Rules 20.01(1), 20.04, 20.02 and 20.06(1), (3)). [12] The courts in Nova Scotia have consistently endorsed a liberal interpretation of the Civil Procedure Rules and in particular of the Rules encouraging pre-trial disclosure: Dowling v. Securicor Canada Ltd. (2003), 221 N.S.R. (2d) 79; N.S.J. No. 237 (Q.L.)(C.A.). 2. The relevance of Mr. Kaufman’s refusal to turn over the documents: [13] Mr. Kaufman submits that the documents are not within the control of the Province for the simple reason that he will not turn them over. The Chambers judge rejected this position, holding that whether a document is in the “control” of a party is determined by the party’s legal right to the document and the party’s ability to enforce that right: para. 11. Therefore, the legal rights as between Mr. Kaufman and the Province in relation to the documents were, to the judge’s mind, directly relevant to whether they could be said to be in the “control” of the Province. [14] The appellant submits that this reasoning is wrong. He argues that documents are not in the control of a party if there is a legitimate or good faith dispute between the party and a non-party with respect to their respective rights over documents and the non-party refuses to comply with the party’s request to turn them over: Canada (Attorney General) v. Spencer (2000), 199 Sask. R. 127 (C.A.). However, the Spencer case does not stand in the way of the Chambers judge resolving the dispute between Mr. Kaufman and the Province as to whom, in law, has control over the documents. Both were represented on the insurers’ application and are bound by the judge’s determinations. While there may be some cases in which this “three-cornered” procedure would be awkward or objectionable, this is not such a case. I agree with the Chambers judge when he says that control of the documents is determined by the rights of the parties, not by the positions they may choose to adopt. And I see no reason in this case that the rights of control as between Mr. Kaufman and the Province should not be determined in the context of the application that was made to the judge. 3. Mr. Kaufman as an agent of the Province: [15] The Chambers judge thought that if Mr. Kaufman was an agent of the Province and held the documents within the ambit of that agency, they were within the control of the Province. He put it this way at para. 12: “If Mr. Kaufman was an agent of the Province and if he holds the documents within the ambit of his agency, then he holds them for the Province, who must produce any that are relevant and not privileged.” While accepting that Mr. Kaufman had operated independent of the Province in carrying out his assigned tasks, the judge ruled, following Wright, J. in Nova Scotia (Attorney General) v. Royal and Sun Alliance Insurance Co. of Canada (2000), 190 N.S.R. (2d) 208; N.S.J. 402 (Q.L.)(S.C.) that although independent with regard to carrying out his mandate, Mr. Kaufman was nonetheless an agent of the Province. The Province, said the judge, owned the documents and had the right to direct Mr. Kaufman to turn them over. [16] The appellant has two main submissions with respect to this part of the judge’s reasoning. First, the appellant contends that the Chambers judge erred in finding that the Province “owned” the documents generated by Mr. Kaufman and his staff during the course of his review. Second, the appellant submits, in effect, that the judge erred by failing to properly characterize the nature of the relationship between Mr. Kaufman and the Province. [17] I will briefly set out the facts relating to the terms of Mr. Kaufman’s engagement and then turn to these two submissions. a. facts relating to agency: [18] The facts before Moir, J. relating to Mr. Kaufman’s mandate were these. According to his report, Mr. Kaufman was appointed by the Government of Nova Scotia in November of 1999 to conduct an independent review of the Government response to reports of institutional abuse in Nova Scotia. His terms of reference required him to report on the review’s findings to the Minister of Justice and stated that his report would be released to the public thereafter. In his report, Mr. Kaufman indicated that he was conducting a review on behalf of the Minister of Justice and therefore “... stood in the shoes of the Minister.” This comment was made in the context of explaining how Mr. Kaufman had been given access to potentially privileged and other information not available to the general public. [19] The Deputy Minister of Justice explained the legal status of Mr. Kaufman’s review to senior staff in a memorandum dated February 29, 2000. He referred to the fact that Mr. Kaufman had been retained by the Minister of Justice, that he had not been appointed under the Public Inquiries Act, R.S.N.S. 1989, c. 372 but had been promised by the Minister that he would have “... full access to all documents and the full cooperation of government.” The memo indicated Mr. Kaufman had been retained to provide “an independent, arms length and neutral review of government action.” It emphasized the importance of Mr. Kaufman being, and being perceived to be, independent of interested persons, including the Department of Justice and its employees. Apart from the terms of reference provided to him, Mr. Kaufman was otherwise “free of government direction or influence as to how he fulfill[ed] his mandate.” As the Deputy put it, Mr. Kaufman “... had been retained to make independent findings and has full intellectual and operational independence.” His review was described as a Ministerial undertaking – doing work that the Minister could do himself or have others do for him under his authority as Minister. “Therefore, [the deputy continued] providing information to Mr. Kaufman does not constitute a waiver of lawyer/client privilege or Crown privilege any more than providing information to the Minister or a private law firm retained to advise or represent government on a particular file.” b. Ownership of the documents: [20] On the question of ownership of the documents, I am inclined to agree with the appellant. There is certainly authority for the view that working papers prepared by a professional person in the course of carrying out his or her mandate do not necessarily become the property of the client: Leicestershire County Council v. Michael Faraday & Partners Ltd., [1941] 2 All E.R. 483 (C.A.); Tersigni v. Circosta, [1997] O.J. No 1860 (Q.L.)(Gen.Div.); Spencer v. Crowe (1986), 74 N.S.R. (2d) 9; N.S.J. No. 218 (Q.L.)(S.C.T.D.). It all depends on the particular engagement and its terms. I do not think that the record here allowed the question of ownership to be finally determined. In any event, the critical issue is not that of legal ownership of the documents, but whether the Province has the right to control them. c. The nature of the relationship between Mr. Kaufman and the Province: [21] The appellant submits that the judge’s characterization of Mr. Kaufman as an agent of the Province is not particularly apt. Be that as it may, the appellant says that the evidence concerning the relationship showed that the Province never asserted a right to control the appellant during or after he had fulfilled his terms of reference. [22] I respectfully agree with the second part of this submission. [23] As noted, the learned Chambers judge treated his finding of agency as dispositive of the issue of control: if Mr. Kaufman was an agent of the Province and held the documents in the ambit of that agency, then he holds them for the Province. With respect, I disagree that the finding of agency is the end of the issue. Rather, it is the beginning. The question is not simply whether Mr. Kaufman was an agent of the Province, but what obligations to the Province the particular relationship between them carried with it. [24] The term “agent” describes persons in a wide range of different circumstances. As Professor F. M. B. Reynolds points out in Bowstead and Reynolds on Agency , 17th ed. (London, Sweet & Maxwell, 2001) at para. 1-002, “[a] major problem in the application of the law in this area is that questions are frequently asked of lawyers in forms such as “Is A an agent?” ... as if a clear answer could be given for the purposes of resolving a dispute. Any useful answer has to be couched in a much more restricted form, for agency is a relative notion and there are many acceptable uses of the term which do not always coincide with each other.” (Emphasis added) [25] The wisdom of this observation is borne out by this case. This is an agency relationship of a very special character. At least two of what are often considered to be defining characteristics of agency are almost entirely lacking. [26] First, an agent generally has the authority to affect the principal’s legal relations with third parties: see for example, Bowstead at paras. 1-001 and 1-004; G. H. L. Fridman, The Law of Agency, 4th ed. (London, Butterworths, 1976) at 8. But on the record in this case, Mr. Kaufman had virtually no such authority other than what was necessary for the exercise of his operational independence. His sole mandate was to review and report. [27] Second, control by the principal of the agent is generally a key component of an agency relationship: Bowstead at para. 1-017. But the record here shows that the Minister retained no such control. The whole point of the exercise was that Mr. Kaufman would have complete intellectual and operational independence. The value of his work depended on it. As the Deputy said in his memorandum to senior staff, “[t]he sole direction to Mr. Kaufman from government is the terms of reference ... [He] is otherwise free of government direction or influence as to how he fulfills his mandate ... [He] has full intellectual and operational independence.” In effect, the only control retained by the Minister over Mr. Kaufman was to revoke the authority which he had conferred on him. [28] The question, in my view, is not so much whether this relationship is aptly characterized as one of agency, but what were the rights and obligations in relation to the documents as between Mr. Kaufman and the Province in the particular relationship into which they entered. [29] It follows, in my respectful view, that the Chambers judge’s reasoning in relation to this question is incomplete. Contrary to the judge’s view, it does not necessarily follow from the characterization of Mr. Kaufman as an agent of the Province that his working papers generated in carrying out his assignment are subject to the Province’s direction. The terms of his agency must be examined. He clearly was an agent for purposes of access to information: as Mr. Kaufman said, he stood in the shoes of the Minister for the purposes of access to potentially privileged material. I see no basis to suggest otherwise. That, of course, as the Attorney General submits, has important implications for claims of privilege as well as for the procedure to be followed if and when production of any of this material is ordered. But that is only one aspect of the relationship between the Province and Mr. Kaufman. It does not answer the question which must be faced in this case as to whether their relationship gives the Province the right to direct the disposition of these documents. [30] I agree with the Chambers judge that control of the documents is determined by the principal’s right to the documents and the ability to enforce that right. It follows that the rights of Mr. Kaufman and the Province with respect to these documents turn on the terms of the arrangement between them. So far as the record discloses, the express terms of their arrangement were silent on this precise question. But in my view, the broad terms of the arrangement provide an answer. And this is where I part company from the learned Chambers judge. [31] Mr. Kaufman was promised complete intellectual and operational independence. In other words, what he concluded and how he carried out his mandate was left completely up to him provided that he reported to the Minister. In carrying out his mandate, Mr. Kaufman decided to give assurances to individuals whom he or his staff interviewed “that so far as legally possible, any such information would be confidential.” This was an operational decision about how to carry out his mandate which Mr. Kaufman was specifically entitled to make independently and without being subject to direction from or control by the government. Under the terms of his retainer, the government did not retain any control over such operational decisions. I do not understand how the government may now assert the right to do so, having specifically and very publicly announced that it would not. Therefore, it seems to me, with respect, that the disposition of documents produced in the course of carrying out his mandate was left to the independent operational decision of Mr. Kaufman. He made that decision and the government retained no control to direct him otherwise. In other words, it was within the scope of Mr. Kaufman’s arrangement with the Minister to decide what of his working papers would be provided to the government and having exercised that authority, the government cannot now seek to revoke that authority after the fact. [32] It follows, in my respectful view, that given the terms of his engagement, the documents generated in the course of carrying out Mr. Kaufman’s mandate generally are not within the control of the Province and Mr. Kaufman has no obligation to follow the Province’s direction as to what to do with them. Respectfully, I would conclude that the learned judge erred in holding otherwise. [33] The Chambers judge reached the conclusion he did partly because he could see no factual basis to distinguish between the status of Mr. Kaufman and that of Mr. Stratton who Wright, J. found to be an agent of the Province in Nova Scotia (Attorney General) v. Royal & Sun Alliance Insurance Co. of Canada (2000), 190 N.S.R. (2d) 208; N.S.J. 402 (Q.L.)(S.C.). I respectfully cannot agree that the cases are indistinguishable. It does not appear from the terms of reference for Mr. Stratton’s investigation that he was promised anything like the complete operational independence of which Mr. Kaufman was assured. Mr. Stratton turned over the documents to a solicitor in the Department of Justice and did not appear in the proceedings to dispute the assertion that the documents were within the control of the Province. The focus of Wright, J.’s decision was his assessment of the claims of solicitor-client and cabinet privilege and confidentiality. In the present case, Mr. Kaufman has not asserted privilege with respect to any documents in his possession but has presented cogent argument that the documents are not within the control of the Province. I do not consider my holding in this case to be inconsistent with the result arrived at by Wright, J. 4. The Provinces’ right of access to the documents: [34] Mr. MacDonald, in his able argument, submitted the real issue here is not ownership or the right to dispose of the documents, but whether the Province has the right to have access to and copy them. He relied on McInerney v. MacDonald, [1992] 2 S.C.R. 138 and Traverse v. Turnbull (1996), 151 N.S.R. (2d) 302; N.S.J. 212 (Q.L.)(C.A.) for the proposition that the Province has a right to access and copy documents produced in the course of Mr. Kaufman’s engagement. I agree that where a party has the right to have access to and obtain copies of documents, they are in the control of the party for the purposes of Rule 20.01. However, I do not think these cases are of assistance in determining whether the Province, in the circumstances of this case, has such rights in relation to the documents sought. [35] McInerney was concerned with whether, in the absence of regulatory legislation, patients are entitled upon request to inspect and copy the contents of their medical files. The Supreme Court of Canada answered this question in the affirmative, but did so following a minute examination of the particular relationship between physician and patient. The judgment illustrates that the right to access and control of information must be assessed in light of the particular relationship out of which the question arises. [36] Central to the reasoning in McInerney, for example, was the finding that “... information about oneself revealed to a doctor acting in a professional capacity remains, in a fundamental sense, one’s own”: at p. 150. In so far as his working papers are concerned, I see no parallel between the patient-physician relationship addressed in McInerney and that between Mr. Kaufman, who was mandated to do an independent review, and the Province, who retained him to do it. There is virtually no parallel between the sorts of information at issue. In McInerney, the information was about the patient, supplied by the patient to the physicians in the course of obtaining medical advice and treatment. In the present case, the information was supplied to Mr. Kaufman by third parties in order to allow him to discharge his mandate from the Province for which he had complete operational independence. Unlike the patient’s medical information in McInerney, there is no meaningful way in which such information can be said ever to have been or to have become the Province’s own. Or course, entirely different factors come into play to the extent that Mr. Kaufman was provided by the Province with privileged information. [37] Traverse v. Turnbull, supra, simply applied McInerney to the question of who must pay the cost of copying the documents and I do not see it as being helpful on the question of whether the Province has a right of access to the documents in issue here. [38] To repeat, the operational independence conferred by the Province on Mr. Kaufman means that, other than by due process of law, the Province only has whatever access to the documents prepared in the course of carrying out his mandate that Mr. Kaufman determines the Province ought to have. Putting aside the question of privileged documents which the Province permitted Mr. Kaufman to review, he and not the Province has control of the documents because that was the authority which the Province gave him. 5. Production from a non-party: [39] Given that the documents are not within the possession, custody or control of a party, whether they should be produced depends on the principles governing production from non-parties. As Mr. Kaufman recognized, there were limits on how far he could assure confidentiality to those interviewed as he is not immune to the normal processes of the court. So the question is whether he, as a non-party to the litigation, may be compelled to produce the documents sought by the insurers. [40] The learned Chambers judge did not rule on this aspect of the case. Although on appeal we undoubtedly have the authority to make any order the judge could have made, the state of the record is not very conducive to our ruling on the third party production aspect of the case at this stage. The record does not include any specific information about the nature of the documents that may be in Mr. Kaufman’s possession or control. The Rules relating to production from non-parties specify that the documents sought might be compelled at a trial or hearing (Rule 20.06(2)) and, in the case of non-parties, it is possible that the analysis of whether production is necessary for disposing fairly of the proceeding (20.06(3)) and is not injurious to the public interest (20.06(3))could take account of somewhat different factors than would normally govern production from parties. The record in this case does not meaningfully address these considerations. [41] I would, therefore, decline to express an opinion on whether the insurers have established an entitlement to production from Mr. Kaufman under the Rules relating to production from non-parties. I would, however, make it clear that the disposition of the appeal which I propose is without prejudice to the insurers renewing their application for production from Mr. Kaufman as a non-party to the litigation. V. Disposition: [42] I would, therefore, grant leave to appeal, allow the appeal and set aside the judge’s order. This is without prejudice to the respondents renewing their application in Supreme Court Chambers for production from Mr. Kaufman on the basis that he is a non-party to the litigation. [43] We were advised that the Province had not at the time of the hearing undertaken to pay Mr. Kaufman’s legal fees for pursuing this appeal. In my view, he has done so in fulfilment of his mandate from the Province. Unless some arrangement has been made in the meantime, I would order the Province to pay Mr. Kaufman’s costs on a solicitor and his own client basis forthwith. I would make no other order as to costs. Cromwell, J.A. Concurred in: Roscoe, J.A. Bateman, J.A.