COURT OF APPEAL
        FOR BRITISH COLUMBIA

Citation:

British
                Columbia v. British Columbia Government

and
                Service Employees' Union,

2005 BCCA
            14

Date: 20050112

Docket: CA031778

Between:

Government
      of the Province of British Columbia

Appellant

(
Plaintiff
)

And

British
      Columbia Government and Service Employees' Union

Respondent

(
Defendant
)

Before:

The Honourable
            Madam Justice Prowse

The Honourable
            Mr. Justice Mackenzie

The Honourable
            Mr. Justice Smith

P.A. Gall,
            Q.C. and M.F. Rusen

Counsel for the Appellant

K.R. Curry
            and E. Ostrower

Counsel for the Respondent

Place and
            Date of Hearing:

Vancouver, British Columbia

November 12, 2004

Place and
            Date of Judgment:

Vancouver, British Columbia

January 12, 2005

Dissenting
              Reasons by
:

The Honourable
            Madam Justice Prowse

Written
              Reasons in the Majority by:

The Honourable
            Mr. Justice Mackenzie (Page 30, para. 61)

Concurred
              in by:

The Honourable
            Mr. Justice Smith

Reasons for Judgment of the Honourable Madam Justice
        Prowse:

INTRODUCTION

[1]

The
      Government of the Province of British Columbia (the "Employer")
      is appealing pursuant to s. 100 of the
Labour Relations Code
,
      R.S.B.C. 1996, c. 244 (the "Code") from the interim order of
      an Arbitrator, made March 26, 2004, providing for the pre-hearing disclosure
      of the medical records (including psychological records) of a grievor who
      has made a disputed claim for Short-Term Illness and Injury Plan Benefits
      ("STIIP").  The disclosure order was made subject to strict conditions
      on the use of those records.  Leave to appeal was granted on June 29, 2004.

[2]

The
      impugned provisions of the order in issue, which counsel have referred
      to as a "
Ryan
order" (the name is taken from the
      Supreme Court of Canada decision in
A.M. v. Ryan
, [1997]
      1 S.C.R. 157), state that the records requested be disclosed, but on terms
      that:

. . . only Counsel for the Employer and its medical experts may view
      all of [the grievor's] clinical records; any person who views the documents
      must keep them confidential; the documents are to be used only for the
      purposes of the hearing; only one copy of the notes are to be made.  Finally,
      all of the Grievor's medical documents must be destroyed at the conclusion
      of this hearing.  [at pp. 18-19]

[3]

In
      making this order, the Arbitrator made it clear to the parties that they
      could re-apply in the event that these strict terms proved unworkable.  This
      is apparent from the last paragraph of the Arbitrator's reasons, where
      he states:

Finally, this is an interim order.  Although I have
      found that the
Ryan
conditions do not result in a denial of a fair
      hearing to the Employer, as the B.C. Court of Appeal has stated in
Jones
      v. Nelson
, [(1980), 24 B.C.L.R. 109], such orders must be "flexible" and "workable".  As
      the hearing approaches or, in fact, during the hearing itself, each party
      is entitled to reapply to examine these conditions should circumstances
      warrant.

[4]

It
      is common ground that the Employer made no attempt to obtain or review
      the disputed documents in accordance with the terms of this order, or to
      seek a variation of the order in the event it proved unworkable.  Instead,
      the Employer sought leave to appeal.

ISSUES ON APPEAL

[5]

The
      Employer submits that the Arbitrator erred in law in making a
Ryan
order
      on the basis that the effect of the order is to preclude the Employer from
      being able to make full answer and defence to the grievor's claim and to
      interfere with the ability of the Employer to fully instruct and receive
      advice from its counsel.  In summary, the Employer says that the order
      is "outside the bounds of acceptability" of disclosure orders.

[6]

The
      parties also raise an issue as to the appropriate standard of review of
      the Arbitrator's order.  The Union submits that the standard is one of
      reasonableness; the Employer submits that the standard is one of correctness.

[7]

It
      is not disputed that this appeal has been properly brought pursuant to
      s. 100 of the Code; that is, that "the decision or award is a matter
      or issue of the general law not included in section 99(1)."

BACKGROUND

[8]

The
      grievor has been working for the Employer in various capacities since 1979,
      initially as a corrections officer, and more recently as an employee in
      Crown Counsel's office.  In 1990, she was terminated for working full time
      at another job while collecting STIIP.  Her termination was grieved, and
      in 1994 she was ordered reinstated by Arbitrator Williams.  In his Award,
      Arbitrator Williams referred to the grievor's dysfunctional family background,
      which included a history of physical and sexual abuse.   He also referred
      to the evidence of Dr. Richard Colby, a Registered Psychologist, who diagnosed
      the grievor as suffering from a "post-traumatic stress disorder" originating
      in her childhood experiences, but triggered by workplace harassment.

[9]

A
      second arbitrator, Arbitrator McConchie, completed the Williams Award in
      June 1999 and the grievor returned to work.

[10]

On
      November 13, 2002, the grievor's supervisor and Crown Counsel at the office
      where she was working had discussions with the grievor concerning her work
      performance.  Shortly thereafter, on November 14, 2002, the grievor left
      work and did not return.  She made a claim for STIIP on the basis that
      she was suffering from panic attacks, anxiety and poor concentration.  In
      support of her claim, she filed a report from Dr. Colby which diagnosed
      her as suffering from "Post-traumatic Stress Disorder; Panic Disorder
      with Agoraphobia; and Major Depressive Disorder, Recurrent."  Amongst
      other things, the report stated that Dr. Colby had been treating the grievor
      since 1991 "primarily in relationship to stresses that were in response
      to work related situations", that "[t]he current situation is
      specifically related to [the grievor's] current employment status" and
      that "any occurrence of employment conflict returns her to her symptomology."

[11]

The
      Employer denied the grievor's claim for STIIP.  It took the position that
      the grievor's absence from work was a response to workplace issues, not
      medical conditions, and that she was medically capable of working.  The
      Employer then made a request for Dr. Colby's notes and records from 1991
      to present; the records of Dr. Chan, a medical doctor in general practice,
      from 1991 to the present, the records of Dr. Marr, a medical doctor in
      general practice, from 1996 to the present, and all of the grievor's medical
      records from the Government Employees' Health Services ("GEHS").

[12]

The
      grievor agreed to provide the Employer with the requested records but only
      on condition that the Union and grievor be allowed to black out all irrelevant
      material, and that only counsel for the Employer and the Employer's medical
      experts have the right to inspect the records.  The Employer would not
      agree to those restrictions.

THE ARBITRATION AWARD

[13]

After
      setting out the relevant background to the dispute, the Arbitrator delineated
      the positions of the parties (at p. 6 of his award):

The
      Employer states that the only restriction that ought to be placed on the
      production of these documents is that they be used solely for the purposes
      of this litigation ("
Jones
order").  The circumstances
      of this case, it argues, does not justify either a
Halliday
order
      [
(1986), 1 B.C.L.R. (2d) 194 (C.A.)]
 the opportunity for the grievor to inspect
      the documents first and remove any irrelevant material  or a
Ryan
order
       restrictions placed on who may have access to the grievor's records.  The
      Employer states that neither the
Halliday
order nor the
Ryan
order
      are to be granted as a matter of right.  And in the case of a
Ryan
order
      it argues that there is a high evidentiary burden.  The Employer further
      argues that to apply anything other than a
Jones
order to the disclosure
      of these documents would unduly restrict its ability to prepare its case.

The Union argues that the parties have negotiated a
      collective agreement that does not permit the Employer to receive all medical
      information in the "first instance"; for example, an Employees'
      application for STIIP benefits.  In these instances, the employer is not
      able to access a physician's confidential report.  The Union argues that
      it is not essential for the Employer's preparation of its case to permit
      persons who are lay witnesses access to the Grievor's clinical records.  However,
      it states that there is great prejudice to the privacy of the Grievor in
      permitting disclosure of her medical records to persons other than counsel
      or medical experts.  They state that this is especially the case in an
      employment relationship.

[14]

The
      Arbitrator then went on to review in some detail court and arbitral decisions
      which had grappled with the issue of disclosure of medical and other personal
      records for the purposes of litigation or arbitration.  His review is admirable
      in terms of its scope, incisiveness and clarity.  I need not refer to his
      reasons at length since the Employer is no longer taking the position that
      the arbitrator erred in refusing to make a
Jones
order, or
      in making a
Halliday
order.  This appeal is restricted to
      the question of whether the arbitrator erred in making a
Ryan
order.

[15]

The
      Arbitrator analyzed the
Ryan
decision in some detail. He
      also referred to several court decisions which had considered or referred
      to
Ryan
, including
Franco v. White
(2001),
      53 O.R. (3d) 391 (Ont. C.A.) (
Ryan
order refused, but disclosure
      also refused under the relevant Ontario Rules of Civil Procedure);
Prasad
      v. College of Physicians and Surgeons
, 2000 BCCA 530 (in Chambers)
      (leave to appeal disclosure order refused, without comment on whether the "
Ryan
order" argument
      constituted an arguable ground of appeal); and
R. v. Mills
,
      [1999] 3 S.C.R. 668 (which considered the constitutionality of ss. 278.1
      to 278.91 of the
Criminal Code
,

R.S.C. 1985,
      c. C-46, in relation to disclosure in sexual assault proceedings).

[16]

The
      Arbitrator also referred to arbitral decisions in which
Ryan
orders
      had been made, including
Celgar Pulp Inc., and Pulp, Paper and Woodworkers
      of Canada, Loc. 1 (Landis)(Re)
(1999), 85 L.A.C. (4th) 436 (Hickling),
      and
British Columbia v. British Columbia Government and Service Employees'
      Union
, [2003] B.C.C.A.A.A. No. 150 (QL), as varied on January 29,
      2004 (Germaine).

[17]

After
      observing that the
Ryan
decision contemplated a partial privilege
      for confidential medical records in certain circumstances, the Arbitrator
      went on to consider whether a partial privilege should be recognized on
      the facts before him.  In so doing, he considered the four factors underlying
      a claim of privilege set forth in
Wigmore on Evidence,
vol.
      8 (McNaughton rev. 1961), and adopted in
Ryan
, namely: (1)
      the communications must originate in a confidence; (2) the confidence must
      be essential to the relationship in which the communication arises; (3)
      the relationship must be one which should be "sedulously fostered" in
      the public good; and (4) if the first three requirements are met, whether
      the interests served by protecting the communications from disclosure outweigh
      the interest in getting at the truth and disposing correctly of the litigation.

[18]

The
      Arbitrator noted that the first three factors were not in dispute, and
      focused his attention on the fourth factor.

[19]

The
      Arbitrator emphasized the extensive nature of the medical records sought,
      and the fact that they would likely cover all aspects of the grievor's
      life, including psychological and medical treatment over the past 12 years.  He
      recognized that because the claim raised "past and current issues
      of post-traumatic stress arising from her previous childhood memories and
      workplace events" and because the grievor was relying on Dr. Colby's
      report, many of the records sought would be relevant.  For that reason,
      he made a
Halliday
order and expressly provided that the
      Employer was entitled to an explanation for any deleted (blocked) materials
      and that any disputed materials could be forwarded to him for determination
      of their relevance.

[20]

In
      dealing specifically with the question of who could review the documents,
      the Arbitrator went on to consider the potential ramifications of unrestricted
      disclosure of the grievor's records in the employment context.  With respect
      to the latter point, the Arbitrator stated (at pp. 17-18):

An individual's employment involves a significant part
      of their life.  It may also involve long-term relationships with co-workers
      and supervisors.  Difficult emotional, psychological and medical issues
      can arise in the workplace.  Where workplace issues and personal issues
      overlap, a delicate balance in regard to privacy must be maintained.  No
      employee should find themselves in circumstances of going back to their
      place of employment, subsequent to an arbitration hearing, with the knowledge
      that their co-workers, supervisors or human resource managers have had
      access to all their most intimate psychological and medical history.  To
      prevent such a result must surely be one of the intended purposes of the
      Supreme Court of Canada remarks in
R. v. Mills
where it stated that
      the right of privacy includes the protection of the mental integrity of
      complainants and witnesses.  Moreover, as stated in
R. v. Mills
,
      disclosure of these kinds of medical and psychiatric records raises issues
      not only of privacy but also security of the person.

[21]

The
      Arbitrator found that the submissions of the parties and the uncontested "evidence" contained
      in them, met the evidentiary onus for a
Ryan
order, with
      particular emphasis on the undisputed fact that the psychological and medical
      history of the grievor involved prior treatment for physical and sexual
      abuse.  I note here that the Arbitrator's reference to uncontested "evidence" must
      be a reference to uncontested "facts", namely the grievor's history
      of abuse and its effect on her in the past (as referenced in the earlier
      Williams and McConchie Awards).  In addition, the Arbitrator had the more
      recent report of Dr. Colby.

[22]

The
      Arbitrator found that the issue of disclosure in this case was distinguishable
      from cases in which the medical records sought related to physical injuries
      flowing from a motor vehicle accident or to a workers compensation claim,
      in which he opined a
Jones
order might be appropriate.

[23]

In
      the result, the Arbitrator concluded that the nature and breadth of the
      documents sought justified not only the editing of clearly irrelevant material
      (a "
Halliday
order") but also restrictions on who
      may review the documents and on what terms (a "
Ryan
order").  In
      his view, the granting of a partial privilege reflected by the
Ryan
order
      protected all interests at stake  discovery, privacy and privilege.

[24]

As
      earlier stated, the Arbitrator emphasized that his order was interim, and
      that it was open to the parties to apply for a review of the conditions
      of disclosure if they proved to be inflexible or unworkable.  (This Court
      was advised that such an application could be dealt with very expeditiously.)

DISCUSSION

(1)
Standard of Review

[25]

The
      determination of the standard of review of an arbitrator's decision has
      been addressed recently by the Supreme Court of Canada in
Voice Construction
      Ltd. v. Construction & General Workers' Union, Local 92
, [2004]
      1 S.C.R. 609, at paras. 15-16:

Canadian jurisprudence
      is plain that in assessing an arbitrator's ruling, the reviewing judge
      should adopt a pragmatic and functional analysis to determine the appropriate
      standard of review:
U.E.S., Local 298 v. Bibeault
, [1988] 2 S.C.R.
      1048;
Pushpanathan v. Canada (Minister of Citizenship and Immigration)
,
      [1998] 1 S.C.R. 982;
Canada (Deputy Minister of National Revenue) v.
      Mattel Canada Inc.
, [2001] 2 S.C.R. 100, 2001 SCC 36;
Dr. Q v. College
      of Physicians and Surgeons of British Columbia
, [2003] 1 S.C.R. 226,
      2003 SCC 19;
Law Society of New Brunswick v. Ryan
, [2003] 1 S.C.R.
      247, 2003 SCC 20;
Toronto (City) v. C.U.P.E.
,
Local 79
, [2003]
      3 S.C.R. 77, 2003 SCC 63. The purpose is to ascertain the extent of judicial
      review that the legislature intended for a particular decision of the administrative
      tribunal:
Pushpanathan
,
supra
, at para. 26;
Dr. Q
,
supra
,
      at para. 21;
C.U.P.E., Local 79
,
supra
, para. 13.

The pragmatic and functional approach involves the consideration
      of four contextual factors: (1) the presence or absence of a privative
      clause or statutory right of appeal; (2) the expertise of the tribunal
      relative to that of the reviewing court on the issue in question; (3) the
      purposes of the legislation and the provision in particular; and (4) the
      nature of the question  law, fact or mixed law and fact:
Pushpanathan
,
supra
,
      at paras. 29-38;
Dr. Q
,
supra
, at para. 26;
Ryan
,
supra
,
      at para. 27. No one factor is dispositive:
Mattel
,
supra
,
      at para. 24.

[26]

The
      question in this case is whether the standard of review is one of reasonableness,
      as posited by the Union, or one of correctness, as posited by the Employer.

[27]

I
      will deal briefly with the application of each of the four factors referred
      to in
Voice Construction
, some of which are overlapping.

(a)
Absence of a Privative Clause

[28]

There
      is no full privative clause protecting the decision of the arbitrator.  Rather,
      s. 100 of the Code provides for a statutory right of appeal to the Court
      of Appeal "if the basis of the decision or award is a matter or issue
      of the general law not included in section 99(1)."  The absence of
      a privative clause and the presence of a statutory right of appeal support
      a less deferential standard of review.

(b)
Relative Expertise
          of the Tribunal

[29]

Where
      the issue is one of general law, as here, the expertise of the courts is
      generally considered to be greater than that of the arbitrator.  The only
      qualification I would add to this statement is that an arbitrator will
      have more expertise in applying the general law to the employment situation,
      and a better understanding of how such an order might impact in the labour
      context than the courts.  Nonetheless, the relative degrees of expertise
      in this case tend to support a less deferential standard of review.

(c)
Purposes of the Legislation and
          the Provision in Question

[30]

The
      general purpose of labour legislation (the Code) was dealt with in
Voice
      Construction
, albeit in relation to the Alberta
Labour Relations
      Code
.  There, Mr. Justice Major, speaking for the majority, stated
      (at para. 28):

The
LRC
seeks
      to regulate and resolve labour disputes in the most efficacious and least
      disruptive way.  Generally, the resolution of labour relations disputes
      by the Labour Relations Board requires "polycentric" decision
      making which means it involves a number of competing interests and considerations,
      and calls for solutions that balance benefits and costs among various constituencies:
      see
Pushpanathan
, at para. 36.
By contrast, proceedings before
      an arbitrator do not require the consideration of broad policy issues.  Instead,
      the role of the arbitrator is to resolve a two-party dispute.
In this
      appeal, that dispute related to the employer's obligation to hire dispatched
      workers.  Even so, this factor suggests a deferential standard of review.

[Emphasis added.]

[31]

In
      the case before this Court, the relevant provision of the Code which provides
      for pre-hearing disclosure is s. 92(1)(c) which simply says that an arbitrator
      may issue pre-hearing orders.  While the application of this provision
      in these circumstances has raised broader policy issues than may usually
      arise in an arbitration, reference back to the greater expertise of the
      courts in matters of general law again tends to support a less deferential
      standard of review.

(d)
The Nature of the Question

[32]

The
      nature of the question here is one of general law involving the interpretation
      and application of the law of privilege in relation to a pre-hearing disclosure
      order.  While there is an element of discretion involved in the determination
      of the terms, if any, which should attach to such an order, the fundamental
      question raised by the Employer in this case is whether a
Ryan
order
      was justified at all.  In my view, the nature of the question also indicates
      a less deferential standard of review.

(e)
Conclusion on Standard of Review

[33]

After
      considering all of these factors, I conclude that the standard of review
      in this case is one of correctness.

(2)
Applicability of a
Ryan
Order

[34]

Since
      the Employer is no longer taking the position that a
Halliday
order
      was inappropriate in this case, the critical issue on this appeal is the
      applicability of the
Ryan
decision and, in particular, the
      applicability of the strict terms imposed in
Ryan
for the
      disclosure of the medical and psychological records in dispute.  Thus,
      for the purpose of this discussion, I will assume that the grievor and
      counsel for the Union will block out those parts of the records which are
      clearly irrelevant to the issue of the grievor's entitlement to STIIP.  It
      is important to note, however, that the blocking of clearly irrelevant
      material from the records does not answer the question of whether the Arbitrator
      erred in granting a partial privilege from full disclosure, since the whole
      point of privilege is to protect documents from disclosure whether they
      are relevant or not.

[35]

I
      turn, then, to the
Ryan
decision. I will refer to both the
      Court of Appeal (1994), 98 B.C.L.R. (2d) 1, and Supreme Court of Canada
      decisions to highlight the difference in the approach they took to the
      issue of disclosure.

[36]

In
Ryan
,
      the plaintiff sued her former psychiatrist for damages for sexual assaults
      he perpetrated on her while she was his patient. Subsequent to the assaults,
      the plaintiff sought treatment from another psychiatrist, Dr. Parfitt.

[37]

The
      defendant applied pursuant to Rule 26(11) of the
Rules of Court
,
      B.C. Reg. 221/90, for production of Dr. Parfitt's clinical records, including
      reporting letters and notes.  Dr. Parfitt, supported by the plaintiff,
      objected to production of her notes, but not of the reporting letters.

[38]

On
      appeal to this Court, the Court found that, because the plaintiff had not
      asserted privilege over the disputed documents, she must be taken to have
      waived any claim of privilege.  The Court went on, however, to find that
      there was a discretion available under Rule 26(11) which could be exercised
      in favour of protecting a  plaintiff's privacy interests where the balancing
      of interests required it.  In the result, this Court held that, "at
      this stage" Dr. Parfitt did not have to disclose her "notes to
      myself which are an attempt to make sense of what the patient is telling
      me" (since Dr. Parfitt was not being called as a witness for the plaintiff),
      but that she did have to produce the reporting letters (to which no exception
      to production had been taken) and notes which recorded discussions between
      herself and the plaintiff.  The latter category of notes were ordered produced
      on the strict conditions imposed by the Arbitrator in this case, including
      terms that they be produced only to the defendant's lawyers and expert
      witnesses.  The order anticipated that one or more of the terms could be
      varied with leave of the Court.

[39]

On
      appeal by the defendant to the Supreme Court of Canada, Madam Justice McLachlin
      (now Chief Justice), speaking for the majority, framed the issue before
      the court at para. 1 of the decision:

Put in terms of principle, should a defendant's right to relevant material
      to the end of testing the plaintiff's case outweigh the plaintiff's expectation
      that communications between her and her psychiatrist will be kept in confidence?

[40]

In
      the result, the majority of the Supreme Court of Canada upheld this Court's
      order restricting disclosure, but did so on the basis of partial privilege,
      rather than under Rule 26(11).  In so doing, McLachlin J. expressly disavowed
      the use of Rule 26(11) on the grounds that "[w]here the doctrine of
      privilege applies, it displaces any residual discretion which might otherwise
      be thought to inhere in favour of the party claiming privilege." (Para.
      15.)  In dissenting reasons, Madam Justice L'Heureux-Dubé agreed that a
      successful claim of privilege had been established.  In her view, however,
      there was a residual discretion under Rule 26(11) to preclude disclosure,
      and any disclosure should have been precluded pursuant to that rule.

[41]

In
      discussing the specific question of whether partial privilege should adhere
      to communications between psychiatrist and patient, McLachlin J. found
      that there was a compelling interest in protecting the communications from
      disclosure under the
Wigmore
criteria, but went on to state
      as follows (at paras. 31-33):

More, however, is
      required to establish privilege.  For privilege to exist, it must be shown
      that the benefit that inures from privilege, however great it may seem,
      in fact outweighs the interest in the correct disposal of the litigation.

At this stage,
        the court considering an application for privilege must balance one alternative
        against the other.  The exercise is essentially one of common sense and
        good judgment.  This said, it is important to establish the outer limits
        of acceptability.
I for one cannot accept the proposition that "occasional
        injustice" should be accepted as the price of the privilege. . .
        .

It follows that
      if the court considering a claim for privilege determines that a particular
      document or class of documents must be produced to get at the truth and
      prevent an unjust verdict, it must permit production to the extent required
      to avoid that result.  On the other hand, the need to get at the truth
      and avoid injustice does not automatically negate the possibility of protection
      from full disclosure.
In some cases, the court may well decide that
      the truth permits of nothing less than full production.  This said, I would
      venture to say that an order for partial privilege will more often be appropriate
      in civil cases where, as here, the privacy interest is compelling.  Disclosure
      of a limited number of documents, editing by the court to remove non-essential
      material, and the imposition of conditions on who may see and copy the
      documents are techniques which may be used to ensure the highest degree
      of confidentiality and the least damage to the protected relationship,
      while guarding against the injustice of cloaking the truth.

[Emphasis added.]

[42]

Both
      the Union and the Employer rely on the passage just quoted.  The Union
      emphasizes the statements that the decision to make an order of partial
      privilege is "one of common sense and good judgment"; that an
      order for partial privilege will be more readily made in civil, as contrasted
      with criminal, proceedings; and that the balancing of interests can be
      achieved by attaching terms to disclosure.  The Union submits that the
      Arbitrator's order is in keeping with those comments.

[43]

The
      Employer submits that the order here is "beyond the outer limits of
      acceptability".  In essence, the Employer submits that
Ryan
orders
      should be limited to "
Ryan
-like" situations in
      which a victim of sexual assault seeks to prevent disclosure of therapeutic
      records generated as a result of the assault, to the perpetrator of the
      assault.  The Employer submits that it is only in cases of that nature
      that it can be said that the privacy interests of the plaintiff outweigh
      the defendant's interest in full and unrestricted disclosure for the purpose
      of making full answer and defence.

[44]

In
      that regard, there is no doubt that there are distinctions between this
      case and
Ryan
.  Perhaps the most significant distinction
      is that the grievor was not sexually assaulted by the party claiming production
      of her records, or by anyone working for the Employer.  In other words,
      this is not a situation where the grievor will be re-victimized in the
      sense of being forced to produce her records to the very person who assaulted
      her.  The grievor is, nonetheless, a victim of past physical and sexual
      abuse, who has been treated for years for the repercussions flowing from
      that abuse.  In that respect, she is at risk of being re-victimized by
      being forced to fully disclose her medical records, even if the re-victimization
      is not at the hands of the perpetrator.

[45]

Further,
      as in
Ryan
, the disclosure of therapeutic and medical records
      of victims of sexual abuse in proceedings such as these, if known, might
      well impact on the willingness of victims to seek treatment or, alternatively,
      to pursue legitimate workplace grievances if they had sought treatment.  In
      other words, if victims of sexual abuse were aware that records of any
      medical and psychological treatment they sought would be available to future
      employers or workers compensation boards in the event of a disputed claim
      in the workplace, they might well wonder if the benefits of counselling
      and other medical treatment were worth the risk of potential future disclosure.

[46]

Finally,
      as in
Ryan
, there is an equality concern underlying the issue
      of disclosure in this case since, as noted in
Ryan
, the victims
      of sexual assault are most often female.

[47]

For
      these reasons, I do not find persuasive the Employer's argument that
Ryan
orders
      should be restricted to cases which closely mirror the facts in
Ryan
.  The
      same policy considerations which justified a finding of partial privilege
      in
Ryan
also tend to justify a finding of partial privilege
      here.  The fact that disclosure is being sought in an employer-employee
      context is an additional reason to restrict disclosure, for the reasons
      given by the Arbitrator and quoted at para. 20 of my reasons.

[48]

In
      my view, the Employer is advocating an unduly narrow interpretation of
      the
Ryan
decision.  While I agree that
Ryan
orders
      should not be made as a matter of course, I am satisfied that the
Ryan
decision
      was intended to provide a framework within which applications for disclosure
      of medical, psychological and other records triggering the
Wigmore
criteria
      could be examined on a case-by-case basis to determine whether a partial
      privilege was warranted, and if so, on what terms.  The decision-maker
      must apply the
Wigmore
criteria, take into account
Ryan
and
      other relevant decisions, and make a judgment call as to where the balance
      falls on the facts.  That is precisely the approach taken by the Arbitrator
      in this case.

[49]

It
      does not follow, however, that because an Arbitrator follows the correct
      approach, his or her order will necessarily be correct.  There may well
      be cases in which it is obvious that a
Ryan
order cannot
      be justified, or where it is apparent that the Arbitrator erred in balancing
      the interests at stake, or otherwise.

[50]

In
      this case, the principal reasons given by the Arbitrator for limiting disclosure
      of the grievor's medical and therapeutic records to the Employer are set
      out at paras. 19-23 of these reasons.  In addition to recognizing the compelling
      privacy interest the grievor had in her medical and therapeutic records
      in light of her background, the Arbitrator was particularly concerned about
      the effect of unrestricted disclosure on the employee-employer relationship.  In
      that regard, he referred to decisions in which similar orders had been
      made by arbitrators in the labour context, including
British Columbia
      Government and Service Employees' Union,
supra,
and
Celgar
,
      supra
(albeit without much discussion in the latter case).

[51]

The
      Arbitrator recognized, however, that the Employer had a valid concern about
      its ability to properly prepare its case and instruct counsel.  For that
      reason, he expressly provided that the parties could apply for directions
      in the event the order proved to be unworkable.  In that regard, it is
      worth noting that where claims are made for STIIP supported by a medical
      report or certificate, it appears to be common for those claims to be dealt
      with in the first instance by the Employer's medical experts, who advise
      the Employer as to whether a claim is justified or whether further medical
      information is required, while preserving the confidentiality of the records.  Although
      the Employer is not restricted to that procedure in the case of disputed
      claims, the procedure recognizes that the foundation of the claim is essentially
      medical in nature and, in my view, provides a further rationale for limiting
      disclosure to counsel and the Employer's medical experts in the first instance.

[52]

While
      it is true that the effect of a
Ryan
order is to interfere
      with the solicitor-client relationship to some extent, it is apparent from
Ryan
and
      other decisions that the Supreme Court of Canada and other courts (and
      tribunals) have concluded that a limited degree of interference with the
      solicitor-client relationship is justified in the balancing of interests
      in some cases.  The Arbitrator was not breaking new ground in making the
      order in dispute.  The fact that the Employer may be placed at somewhat
      of a tactical disadvantage or may have to justify obtaining further direct
      disclosure of documents in order to obtain settlement instructions, for
      example, has not been recognized as a persuasive basis for refusing a
Ryan
order
      where it is otherwise warranted.

[53]

In
      the result, I am not persuaded that the Arbitrator erred in finding that
      the requested documents were subject to a partial privilege in this case.  However,
      that does not end the matter.  A finding of partial privilege triggers
      a consideration of terms which will protect the grievor's privilege to
      the greatest extent possible, while interfering with the Employer's right
      to make full answer and defence and properly instruct its counsel to the
      least extent possible.  Can it be said that the terms imposed here are "outside
      the bounds of acceptability", as contended by the Employer?  In my
      view, the answer to that question must start with a review of the manner
      in which this case was argued before the Arbitrator.

[54]

I
      begin by observing that the Employer over-reached in its claim for production
      of all records on the basis of a
Jones
order.  That request
      completely ignored the privacy and relevancy concerns presented on the
      facts, particularly given the findings of physical and sexual abuse and
      related psychological problems suffered by the grievor and set out in the
      earlier Williams Award.  Further, the Employer placed negligible restrictions
      on the representatives of the Employer who would have access to any records
      produced.  In this Court, the Employer referred to these representatives
      as the Employer's "team".  The factum did not indicate the size
      or make-up of the team; nor does it appear that this was made clear to
      the Arbitrator.

[55]

At
      the hearing of this appeal, the Employer acknowledged that its reference
      to its "team" was unhelpful, and it indicated that effective
      disclosure could likely be made to one or two representatives of the Employer
      who generally handle these types of claims (in some cases without engaging
      counsel).  These would be the people who, together with the Employer's
      medical experts, would instruct the Employer's counsel.  As I understood
      the Employer's submission in this Court, the Employer would not be seeking
      disclosure to anyone with whom the grievor had worked, including her supervisor(s)
      or personnel manager(s).  While those individuals might be witnesses in
      relation to workplace incidents involving the grievor, there was no suggestion
      that they should be privy to the grievor's medical or therapeutic records.

[56]

If
      the Employer had taken this approach before the Arbitrator in the first
      instance, it is possible that the Arbitrator may have made an order which
      permitted one or more persons specified by the Employer to have access
      to the medical records in order to instruct counsel.  Unfortunately, the
      Arbitrator was not asked to consider this option, or to canvass whether
      such an order would be sufficiently protective of the grievor's privacy
      interests.  Nor was it suggested to the Arbitrator that the category of
      documents for which disclosure was sought should be broken down into sub-categories
      with different terms of disclosure being considered for each category.  These
      approaches to disclosure, amongst others, were approved, although not mandated,
      by the majority judgment in
Ryan
.

[57]

Although
      this Court has been provided with a more persuasive case for making a less
      restrictive order for disclosure than was made before the Arbitrator, the
      question remains whether the order made by the Arbitrator was incorrect.

[58]

In
      the result, I am not persuaded that the order was "outside the bounds
      of acceptability" in these circumstances.  It would only be outside
      those boundaries if the
Ryan
decision were given the narrow
      interpretation advocated by the Employer.  I have already stated my view
      that the decision is not so restricted.  Rather, as both the majority and
      dissenting judgments in
Ryan
make clear, the issue of partial
      privilege and the terms of orders made where partial privilege is found
      have to be decided on a case-by-case basis.  That is the approach taken
      by this Arbitrator in his very careful and thorough reasons.  It remains
      open to the parties to return to him in the event the order proves unworkable.

[59]

I
      find it necessary to add that the order cannot reasonably be regarded as
      unworkable unless and until the Employer makes an effort to make it work.  That
      effort would begin with the parties complying with the
Halliday
and
Ryan
orders,
      providing the resulting documents to the Employer's counsel and to the
      Employer's experts, and then returning to the Arbitrator, if necessary,
      in the event that problems arise which require further directions.

CONCLUSION

[60]

I
      would dismiss the appeal.

The Honourable
Madam
      Justice Prowse

Reasons for Judgment of the Honourable Mr. Justice Mackenzie:

[61]

The
      Province of British Columbia (the "Employer") appeals with leave
      the order of an arbitrator concerning disclosure of medical records of
      a grievor in a disputed claim for disability benefits.  The grievor's claim
      is based on a medical condition extending back into a pre-employment medical
      history that includes sensitive particulars of physical and sexual abuse.  The
      background is outlined in the reasons of Madam Justice Prowse.

[62]

Before
      the arbitrator, the Employer contended that the only restriction on full
      disclosure of the records to its "team" should be that the records
      would be used solely for the purposes of the litigation.  The arbitrator
      imposed
Halliday
and
Ryan
terms on disclosure,
      referencing
Halliday v. McCulloch
(1986), 1 B.C.L.R. (2d)
      194 (C.A.) and
A.M. v. Ryan
, [1997] 1 S.C.R. 157.  The
Halliday
terms
      allowed counsel for the grievor to review the records for relevance before
      making disclosure.  The
Ryan
terms required that any person
      who views the documents must keep them confidential and the documents are
      to be used only for the purposes of the hearing.  Only one copy is to be
      made and all of the grievor's medical documents must be destroyed at the
      conclusion of the hearing.

[63]

On
      this appeal, the Employer accepted those terms as reasonable and confined
      its objection to one
Ryan
term, namely that "only Counsel
      for the Employer and its medical experts may view all of [the grievor's]
      clinical records".  The Employer submits that this condition conflicts
      with its ability to receive advice from counsel and to instruct counsel
      in the grievance proceedings.

[64]

It
      is a fundamental common law axiom that a party to litigation is entitled
      to full disclosure of all documents and other evidence that is relevant
      to the litigation, subject only to privileged exceptions.  Disclosure of
      documents to counsel for a party that is withheld from the party itself
      compromises the candor of the relationship between lawyer and client and
      impairs counsel's ability to obtain fully-informed instructions in the
      conduct of the proceedings.  Disclosure limited to counsel and expert witnesses
      should be discouraged in all but very exceptional cases.

[65]

The
      facts of
Ryan
illustrate the exception.  The defendant who
      sought disclosure of the plaintiff's intimate psychiatric records was the
      individual who had sexually assaulted her in the course of his prior psychiatric
      treatment.  The sensitivity to the disclosure of records of therapeutic
      psychiatric treatment to the perpetrator of the assault was acute.  It
      threatened to impair the therapeutic relationship between the plaintiff
      and her treating psychiatrist.  McLachlin J.(now C.J.C.) for the majority
      of the Supreme Court, upheld an order restricting disclosure of the treating
      psychiatrist's reporting letters and notes of discussions with the plaintiff
      to the defendant's solicitors and, as necessary, to his expert witnesses.

[66]

The
      Employer's case before the arbitrator was weakened by its resistance to
      sensible terms, and its reference to the Employer's "team" which
      left the impression of an amorphous group to whom disclosure would be made.  In
      his oral submission before us, Mr. Gall clarified the "team" as
      limited to two officials charged with the responsibility of instructing
      counsel in grievance proceedings and perhaps one additional person at a
      more senior level in the event of a matter that exceeded the authority
      of the others to give the necessary instructions.  None of these individuals
      would have any connection to the grievor's workplace, either as co-workers
      or supervisors.

[67]

This
      clarification would have assisted the arbitrator. The passage from his
      reasons quoted by Prowse J.A. indicates that the Union's main concern in
      resisting disclosure was in permitting access to "persons who are
      lay witnesses".  The arbitrator shared that concern, evident from
      his quoted reference to the difficulty of the grievor returning to employment
      if co-workers and others in the workplace had access to her intimate psychological
      and medical history.  Mr. Gall's position before us was that none of the
      persons to whom it wishes to have disclosure would have any co-worker or
      supervisory connection to the grievor's workplace.  For clarification,
      it should be noted that the records in issue relate primarily to the grievor's
      pre-employment medical history and there is no relevant restriction on
      records related to the grievor's workplace history which counsel may have
      to discuss with co-workers or other lay witnesses in the course of preparing
      their testimony for the grievance hearing.

[68]

In
      my view, the limitation on disclosure goes farther than is necessary to
      meet the legitimate concerns expressed by the Union and the arbitrator
      and cannot be supported under
Ryan
.  The limited disclosure
      in issue does not raise privacy concerns that are similarly compelling.  The
      Employer is an institutional party and its representatives to whom disclosure
      is sought are presumed to be responsible officials charged with the mandate
      of instructing counsel in the defence of the grievance.  They are not part
      of the grievor's workplace environment and they are required by the terms
      of the arbitrator's order to maintain the strict confidentiality of the
      disclosure.  The arbitrator's expedient, a re-application for further disclosure,
      is not an effective answer.  Counsel could be required to explain to the
      arbitrator why he wished to make disclosure to his client.  That would
      impinge on the confidentiality of the solicitor-client relationship and
      potentially involve an explanation to the arbitrator that would prejudice
      the Employer at the hearing.

[69]

The
      appeal comes to this Court pursuant to s. 100 of the
Labour Relations
      Code
, R.S.B.C. 1996, c. 244.  I agree with Prowse J.A. that the
      standard of review on the issue before us is one of correctness.  Applying
      that standard, I think that the arbitrator made a reviewable error by restricting
      disclosure to counsel and the expert witnesses in the face of the Employer's
      presumptive right to full disclosure.  I am satisfied that a more limited
      restriction will adequately meet the compelling privacy concerns of the
      grievor.  The relationship between party and counsel is impaired if counsel
      is unable to fully inform the client and obtain instructions based on full
      and candid disclosure.

[70]

I
      would amend the arbitrator's order to allow the instructing representatives
      of the Employer to view the clinical records to the extent required by
      Employer's counsel to give informed advice and obtain instructions in the
      conduct of the Employer's case.  Under this term, counsel will keep control
      of the records and will have the responsibility to confine disclosure on
      a "need to know" basis to Employer's representatives who are
      not connected to the grievor's workplace and who will be required to maintain
      confidentiality.

[71]

Accordingly
      I would allow the appeal.

The Honourable
Mr. Justice Mackenzie

I Agree:

The
      Honourable
Mr. Justice
      Smith


COURT OF APPEAL
        FOR BRITISH COLUMBIA

Citation:

Commonwealth
                Trust Co. (Re),

2005 BCCA
            13

Date: 20050112

Docket: CA031716

IN THE MATTER
      OF COMMONWEALTH TRUST COMPANY

AND IN THE MATTER OF THE
WINDING
        UP AND RESTRUCTURING ACT

Between:

Commonwealth Investors Syndicate Ltd.

Appellant

And

KPMG Inc.

Respondent

And

Deloitte
      Touche Inc.

Respondent

Before:

The Honourable
            Madam Justice Southin

The Honourable
            Madam Justice Prowse

The Honourable
            Mr. Justice Smith

S. R. Schachter, Q.C. and
G. B. Gomery

Counsel for the Appellant

A. I. Nathanson

Counsel for the Respondent, KPMG Inc.

H. Van Ommen

Counsel for the Respondent, Deloitte Touche
            Inc.

Place and
            Date of Hearing:

Vancouver, British Columbia

6th December, 2004

Place and
            Date of Judgment:

Vancouver, British Columbia

12th January, 2005

Written
              Reasons by
:

The Honourable
            Madam Justice Southin

Concurred
              in by:

The Honourable
            Mr. Justice Smith

Reasons
              Dissenting in part by:

The Honourable
            Madam Justice Prowse  (P. 15, para. 28)

Reasons for Judgment of the Honourable Madam Justice
        Southin:

[1]

During
      argument in this appeal, counsel for the appellant, Commonwealth Investors
      Syndicate Ltd. (CIS), the controlling shareholder of Commonwealth Trust
      Company (the Company), in response to a remark from the bench on the years
      these proceedings have continued, remarked that when they began he was
      in high school.

[2]

Counsel
      for the respondent, KPMG Inc., the liquidator of the Company, for his part,
      was able to "top" counsel for the appellant by remarking that
      these proceedings began before he was born.

[3]

On
      the 20th December, 1969, the Company resolved to wind up voluntarily, and
      immediately petitioned the Supreme Court of British Columbia for the appropriate
      order.  The shareholders and directors of the Company today are very different
      from the shareholders and directors of the Company in 1969.

[4]

What
      led to that resolution was an attack on a number of companies known as
      the "Commonwealth Group" by the Superintendent of Brokers pursuant
      to the
Securities Act
.  For one aspect of that attack, see
Smith
      v. Commonwealth Trust Co.
(1969), 72 W.W.R. 201 at 203.

[5]

On
      30th December, 1969, Aikins J. pronounced the winding-up order sought and
      appointed, provisionally, Yorkshire Trust Company as Official Liquidator
      of the Company.  Central Guaranty Trust Company (CGT) is the successor
      in title of the Yorkshire Trust Company.  It is, itself, now in liquidation
      and the respondent, Deloitte Touche Inc., is its liquidator.

[6]

In
      1990, consequent upon an application by the appellant for leave to sue
      the liquidator, CGT withdrew as liquidator and, as of the 6th June, 1990,
      Peat Marwick Thorne Inc., then known in the proceedings as "Peats",
      the predecessor in title of the respondent, KPMG Inc., became liquidator
      and so remains.

[7]

All
      the creditors of the Company have been paid.

[8]

By
the
Winding-up and Restructuring Act
,
      R.S.C. 1985, c. W-11:

18.
A court may, on the application of any creditor, contributory,
      liquidator or petitioner for the winding-up order, at any time after the
      order is made, and on proof, to the satisfaction of the court, that all
      proceedings in relation to the winding-up ought to be stayed, make an order
      staying those proceedings, either altogether or for a limited time, on
      such terms and subject to such conditions as the court thinks fit.

[9]

The
      learned judge below, who has been in charge of this winding-up and all
      its contortions for, I believe, some 14 years, in order that the proceedings
      should finally end, on 1st March, 2004, upon the application of KPMG Inc.,
      pronounced this order:

THIS COURT ORDERS
      THAT:

1.    The persons
      identified as the directors of Commonwealth Trust Company ("CTC")
      in Exhibit "B" to the Affidavit of John Allan Coles #1 sworn
      August 21, 2003: J. Allan Coles, Ian M. Adam, Allen M. Fowlis, Sawarne
      Sangara, and H. Nixon Scarfe, (the "Directors") are authorized,
      on behalf of CTC, to seek the consent of the Financial Institutions Commission
      under Section 24(1) of the
Financial Institutions Act
to enable
      CTC to apply to the proper officer under the
Canada Business Corporations
      Act
for an instrument of continuation continuing CTC as if CTC was
      incorporated under the
Canada Business Corporations Act
;

2.    Upon any one
      or more of the Directors filing an affidavit with the Court in these proceedings
      deposing that an instrument of continuation had been issued by the proper
      officer under the
Canada Business Corporations Act
with respect
      to CTC, allowing CTC to be continued as if it had been incorporated under
      the
Canada Business Corporations Act
, and exhibiting a certified
      true copy of such instrument of continuation, and provided that such affidavit
      and exhibit are filed by no later than 180 days from the date of this Order
      (and with liberty to apply for a further extension of time), and upon the
      final determination of the liquidator's pre-stay accounts pursuant to paragraph
      5 of this Order, the liquidation of CTC shall be stayed (the "Effective
      Date"), and as at the Effective Date:

(a)   all proceedings in relation to the winding-up
      of CTC shall be stayed without further order;

(b)   CTC shall be enjoined from initiating or pursuing
      any action proceeding or taking any step, including filing a claim in the
      liquidation of Central Guaranty Trust except for claims filed before January
      1, 2004, or commencing or proceeding with an action or proceeding against
      any person on the basis of anything which occurred, or which ought to have
      occurred, prior to the Effective Date;

(c)   the
      Liquidator:

(i)    shall be discharged as the Liquidator of CTC;

(ii)   shall have no further duties or obligations in relation to the
      liquidation, management or conduct of the affairs of CTC, except as provided
      herein; and

(iii)  shall be released from any claims
      which Canada Customs and Revenue Agency may have for or arising out of
      any unpaid taxes, interest or penalties of the estate in liquidation of
      CTC or the Liquidator's administration thereof;

3.    Within 45 days
      time after the Effective Date:

(a)   The
      Liquidator shall turn over to CTC, as per a direction signed by a majority
      of the Directors, the corporate records of CTC which consist of the documents
      contained in the Documents Inventory, as defined in and attached as Exhibit "C" to
      the Affidavit of Todd Martin #2, sworn September 15, 2003 and which are
      in the Liquidator's possession, provided that:

(i)    the Liquidator may make as part of the Liquidator's administration
      of the liquidation of CTC copies of those records of CTC or of the records
      of the former liquidators of CTC, and, for greater certainty, including
      any of the documents referred to in paragraph 3(a) of this Order, as the
      Liquidator considers necessary for the Liquidator to have a proper record
      of the liquidation of CTC;

(ii)   the Liquidator is not obliged to turn over to CTC the originals
      of any of the Liquidator's records relating to the liquidation of CTC which
      are enumerated in paragraph 23 of the Affidavit of Todd Martin #2, sworn
      September 15, 2003.

(iii)  the Liquidator shall, on receiving a written request on five business
      days' notice from the Directors, at any time prior to the Effective date,
      and from CTC, at any time subsequent to the Effective Date, provide reasonable
      access to, and at the Directors' or CTC's request and on payment of the
      Liquidator's reasonable expenses, copies of, the documents retained by
      the Liquidator as referred to in paragraph 3(a)(ii) of this Order.

(iv)   notwithstanding paragraph 3(a)(iii)
      above, the Liquidator shall be required to retain the documents referred
      to in paragraphs 3(a)(i) and (ii) of this Order for at least six years
      from the date of this Order but not thereafter.  Following six years from
      the date of this Order, if the Liquidator no longer wishes to retain the
      documents referred to in paragraphs 3(a)(i) and (ii) of this Order, it
      shall give CTC at least sixty days' written notice of its intention to
      dispose of those records, and CTC shall have liberty to apply, on notice
      to the Liquidator, for possession of the records.

(b)   after reservation of such sum as the Liquidator
      considers prudent for the purposes of concluding all matters relating to
      the liquidation of CTC, and to the stay of such liquidation including post-stay
      matters, and also including without limitation the obtaining of the approval
      of the Liquidator's accounts and the Liquidator's fees and disbursements
      (including legal fees and disbursements), and the preparation of all materials
      with respect thereto, the Liquidator shall pay all remaining monies in
      its possession which relate to the liquidation of CTC, and assign all the
      Liquidator's right, title and interest in and to the claim previously filed
      by the Liquidator with Deloitte & Touche Inc., the Liquidator of Central
      Guaranty Trust, to CTC, as per a direction signed by a majority of the
      Directors;

(c)   CTC shall send a copy of the instrument of continuation
      by regular mail to all known shareholders of CTC at their last known addresses,
      and place an advertisement in one edition of the Globe & Mail newspaper
      notifying shareholders of CTC that the instrument of continuation has been
      granted, and shall file with the Court a proof of having done so;

4.    If the affidavit
      and exhibit confirming the continuance of CTC under the
Canada Business
      Corporations Act
are not filed with the Court by the date referred
      to in paragraph 2 of this Order, then subject to a Court Order granted
      by no later than the date provided for in paragraph 2 of this Order or
      as extended if applicable, and directing the Liquidator to not proceed,
      the Liquidator shall take all necessary steps to conclude the liquidation
      of CTC, including without limitation disbursement of monies in its possession
      and effecting its discharge;

5.    With respect
      to approval of the Liquidator's and the Liquidator's counsel's accounts
      which have not been approved previously, the Liquidator and such counsel
      shall within a reasonable time after the filing of an affidavit deposing
      that an instrument of continuation referred to in paragraph 2 of this Order
      has been issued:

(a)   provide summaries of pre-stay accounts to the
      counsel for CIS; and

(b)   provide to a Registrar of the Court such materials
      as the Liquidator and its counsel consider appropriate in relation to such
      pre-stay accounts, including written submissions, and CIS is hereby granted
      liberty to also file submissions in that regard, and Registrar may approve
      such accounts in the amounts as presented, or in different amounts.  The
      stay of the liquidation is to be delayed and not to take place until the
      final resolution of the passing of the accounts of the Liquidator for all
      pre-stay matters including any appeals from the Registrar's decision.  Upon
      conclusion of all post-stay matters including matters referred to in paragraph
      3 of this Order, the Liquidator is to pass its accounts before the Registrar
      in the same manner as the pre-stay accounts.

6.    Nothing in this
      Order requires the Financial Institutions Commission to give its consent
      with respect to the application referred to in paragraph 1 of this Order,
      or the proper officer under the
Canada Business Corporations Act
to
      issue an instrument of continuation with respect to CTC.

7.    Any party affected
      by this Order shall be at liberty to apply to this Court for such further
      orders and directions as may be required to give effect to this Order or
      as the Court may deem appropriate.

8.    Subject to taxation,
      CIS is to recover its legal fees on a full indemnity basis for this application
      from the estate of CTC with liberty to apply for indemnity for legal fees
      between the date of this Order and the stay of the liquidation.

9.    CIS is to have
      its costs of the proceedings to date on a full indemnity basis in the same
      manner that costs were awarded to CIS in my Reasons for Judgment in these
      proceedings dated April 29, 1997.

10.   The Special General Meeting of CTC held August 15, 2003 is hereby
      authorized
nunc pro tunc
.

[10]

The
      reader will note that the stay under it is not immediate.  It is dependent
      upon an instrument of continuation and a determination of the liquidator's
      accounts.

[11]

When
      it does become effective, any claim that the company may have against anyone
      for any pre-stay matters is barred (clause 2(b)).

[12]

Until
      it is effective, the liquidator may retain the records of the Company.

[13]

CIS
      has three objections:

1.    It says that it is not
      right that once it retains control of its own affairs, it should not, if
      it can find something to sue about, be able to sue.

2.    In the circumstances,
      all the records of the Company should be returned to it.

3.    It is not right that
      the stay be postponed until the accounts of the liquidator are passed and
      all appeals there from are concluded.

[14]

The
      learned judge, in his reasons, 2004 BCSC 278, began by giving a history
      of this winding-up.  He said, in part:

[8]  ... The liquidation
      has been exceptionally acrimonious and litigious.

[9]  In the course of the winding-up, CIS has advanced or attempted to
      advance claims of conspiracy, breach of fiduciary duty and negligence against
      Canada Deposit Insurance Corporation ("CDIC"), which provided
      deposit insurance to Commonwealth's depositors, and against Yorkshire Trust
      Company and Central Guaranty Trust Company ("CGT"), both court-appointed
      liquidators of Commonwealth.  CIS sought to disqualify the law firm acting
      for CDIC, twice applied to disqualify the winding-up judge on the grounds
      of bias and has brought multiple appeals including an application for leave
      to appeal an order fixing costs in which the amount at issue was $260.00.  Toy,
      J.A. refused the application and characterized it as "a good example
      of trivialization of the process, which I would decline to encourage" (
Canada
      Deposit Insurance Corp. v. Commonwealth Trust Co.
(November 13,
      1992), [1992] B.C.J. No. 2672, 7 B.C.A.C. 161).

[15]

The
      learned judge then detailed the course of litigation since 1989.

[16]

Counsel
      for the appellant says that the reasoning of the chambers judge is "captured
      in the following passages":

[43]  In my view,
      considering the history of this liquidation, it is necessary that extensive
      measures be taken to safeguard the liquidator.  I expect that the future
      course of dealing between CIS, or Commonwealth under the control of CIS,
      and the liquidator will be characterized by the same level of acrimony
      and litigiousness as has been the case for the past 15 years of the liquidation.  That
      should not be permitted to take place outside the supervisory powers of
      the Court under the
Act
.

* * *

[46]
I do not agree
      with Mr. Shields' submission.  Any litigation relating to matters preceding
      a stay of the liquidation should take place within the liquidation.  I
      am confident that if the claims advanced or sought to be advanced by CIS
      in the liquidation had been brought in proceedings outside of the liquidation,
      it would have created the tangle of litigation that the
Act
seeks
      to avoid.  If there are matters of merit that should be dealt with, they
      are to be dealt with within the liquidation.  No such matters have been
      brought to my attention.

[17]

Counsel
      goes on to say that underlying his reasoning are erroneous propositions:

(a)   After the liquidation is stayed, the court must
      continue to exercise supervisory power under the
Winding-Up and Restructuring
      Act
because the court's customary powers to control its own process
      are wholly inadequate;

(b)   Through its past conduct, CIS has proven itself
      an unreasonable and vexatious litigant and, once the stay is lifted, Commonwealth
      will function as nothing more than a conduit for litigation desired by
      CIS;

(c)   Since
      CIS has not yet sought to bring or identify a claim against the Liquidator
      in the context of the present application, no such claim will exist.

[18]

Counsel
      then says:

26.   Staying the liquidation fundamentally changes the context in which
      the court must examine the possibility of claims against the Liquidator
      and others.  While the liquidation is on foot, the court concerns itself
      with the protection of the estate and the process by which the liquidation
      is to be concluded in an orderly and timely way.  These are not the considerations
      when the liquidation is stayed.  As a result of the stay, the estate is
      placed into the hands of the shareholders, acting through their elected
      board of directors, and it becomes the directors' task to decide whether
      litigation is in the company's best interests.  The chambers judge failed
      to take this change into account.

[19]

The
      fundamental issue is whether the learned judge had the power under s. 18
      to make this order.  That raises a question of construction.  Do the words, "on
      such terms and subject to such conditions as the court thinks fit" authorize
      a term preventing the Company from pursuing any claims it may have for
      wrongs done to the Company during the time when its affairs were in the
      hands of a liquidator?

[20]

The
      question is whether Parliament could have intended to confer such a power.  The
      words are, indeed, wide enough to encompass such a power.  But, as was
      said many centuries ago:

From which cases it appears, that the sages of the law heretofore have
      construed statutes quite contrary to the letter in some appearance, and
      those statutes which comprehend all things in the letter, they have expounded
      to extend but to some things, and those which generally prohibit all people
      from doing such an act, they have interpreted to permit some people to
      do it, and those which include every person in the letter they have adjudged
      to reach to some persons only, which expositions have always been founded
      upon the intent of the Legislature, which they have collected sometimes
      by considering the cause and necessity of making the Act, sometimes by
      comparing one part of the Act with another, and sometimes by foreign circumstances.
      So that they have ever been guided by the intent of the Legislature, which
      they have always taken according to the necessity of the matter, and according
      to that which is consonant to reason and good discretion.

(
Stradling v. Morgan
(1560), 1 Plowd.
      199 at 205, 75 E.R. 305)

[21]

I
      have no difficulty in holding that the words do confer a power to prevent
      claims against a liquidator.  The reason is that a liquidator must pass
      accounts and, if the liquidator has done anything which the liquidator
      ought not to have done, the remedy for the company is to pursue the matter
      in the accounting.

[22]

But,
      it seems to me highly improbable that Parliament could have intended to
      confer a power to prevent a company, upon recovering control of its own
      affairs, from bringing an action for a wrong done to it by a third party
      during the years that a company was in the hands of a liquidator.

[23]

I
      would allow the appeal to the extent of amending clause 2(b) to substitute
      for the words "against any person", the words "against the
      liquidator or previous liquidator, Central Guaranty Trust Company, or the
      liquidator of Central Guaranty Trust Company, Deloitte Touche Inc.".

[24]

The
      other two impugned provisions are, it seems to me, provisions which fall
      sensibly within the words at issue.  They are ancillary to the completion
      of the liquidator's duties and the release of the present liquidator from
      any further duties in connection with this liquidation.

[25]

Accordingly,
      I would allow the appeal only to the extent which I have indicated.

[26]

Although
      the appellant has succeeded in this appeal to the narrow extent indicated,
      I see no purpose in making any award of costs because, if such an award
      were made against the liquidator, the liquidator would have every right
      to charge the costs so ordered in its accounts.

[27]

The
      style of cause on the order of this Court, on its being drawn up, shall
      be as shown on these reasons for judgment.  The style of cause on the papers
      filed by the parties in this appeal was misleading.

The Honourable Madam Justice Southin

I agree:

The Honourable
      Mr. Justice Smith

Reasons for Judgment
        of the Honourable Madam Justice Prowse:

[28]

I
      have had the privilege of reading, in draft form, the reasons for judgment
      of Madam Justice Southin.  I agree with her that s. 18 of the
Winding
      Up and Restructuring Act
, R.S.C. 1985, c. W-11, provides the court
      with a very broad discretion to attach conditions to an order staying liquidation
      proceedings.  I also agree that the provisions of the order under appeal
      relating to the retention by the liquidator of the corporate records of
      Commonwealth Trust Company ("CTC"), and the taxing of the liquidator's
      accounts prior to the stay taking effect, are terms which properly fall
      within the exercise of that discretion.  Finally, I agree with Madam Justice
      Southin's comments at para. 22 of her reasons that it is:

... highly improbable that Parliament could have intended to confer a
      power to prevent a company, upon recovering control of its own affairs,
      from bringing an action for a wrong done to it by a third party during
      the years that a company was in the hands of a liquidator.

[29]

I
      would go further, however, and state that it is also highly improbable
      that Parliament could have intended to foreclose a company which had regained
      control over its own affairs in circumstances such as these from commencing
      action against a liquidator, or former liquidator, for fraud or misrepresentation
      of a material fact relating to the liquidation proceedings if such a cause
      of action were discovered subsequent to the effective date of the stay
      order.  In that regard, I note that counsel for the respondent KPMG Inc.,
      in a submission adopted by counsel for Deloitte & Touche Inc., stated
      that it was not the intention of the order to foreclose actions based on
      fraud or material misrepresentation and that such a term would likely be
      contrary to public policy.  It is clear, however, that the present wording
      of the order is sufficiently broad to foreclose such actions.

[30]

While
      I think it would have been preferable to frame this aspect of the order
      as one releasing the liquidators from all claims by CTC except claims for
      fraud or material misrepresentation discovered after the effective date
      of the stay, I am not prepared to find that framing the condition as one
      precluding CTC from suing the liquidators amounted to an error in law,
      given the lengthy and tortured history of these proceedings.

[31]

In
      the result, I would allow the appeal by amending para. 2(b) of the order
      as follows:

CTC shall be enjoined from initiating or pursuing any action or proceeding
      or taking any step, including filing a claim in the liquidation of Central
      Guaranty Trust except for claims filed before January 1, 2004, or commencing
      or proceeding with an action or proceeding against the liquidator or previous
      liquidator, Central Guaranty Trust Company, or the liquidator of Central
      Guaranty Trust Company, Deloitte Touche Inc., on the basis of anything
      which occurred, or which ought to have occurred, prior to the Effective
      Date, except for an action or proceeding based on fraud or material misrepresentation
      discovered after the Effective Date;

[32]

In
      all other respects, I would affirm the order under appeal.

The Honourable
Madam
      Justice Prowse


COURT OF APPEAL
        FOR BRITISH COLUMBIA

Citation:

R.
                v. Kalmocoff,

2005 BCCA
            38

Date: 20050112

Docket: CA031550

Between:

Regina

Appellant

And

James Cameron
      Kalmocoff

Respondent

Before:

The Honourable
            Chief Justice Finch

The Honourable
            Madam Justice Prowse

The Honourable
            Madam Justice Levine

Oral Reasons for Judgment

J. Duncan

Counsel for the Appellant

K. Redmond

Counsel for the Respondent

Place and
            Date:

Vancouver, British Columbia

12 January 2005

[1]

FINCH
        C.J.B.C.
:  The Crown appeals a sentence ordering
        a custodial sentence and a conditional sentenced to be served concurrently,
        because the order did not conform to the provisions of Section 742.7
        (1) of the
Criminal Code
which says that a conditional
        sentence, if imposed in conjunction with a sentence for another offence,
        must be suspended until any period of imprisonment for the other offence
        has been served.  The sentence as pronounced was not lawful.

[2]

Accordingly,
      I would grant leave to appeal, and I would allow the appeal in the terms
      sought by the Crown, namely that on Count 1, a sentence of six months incarceration
      as ordered by the sentencing judge, but then on Count 2, the conditional
      sentence of 18 months less a day be served consecutive to the sentence
      on Count 1, on the same terms and conditions as ordered by the sentencing
      judge.

[3]

PROWSE
        J.A.
:  I agree

[4]

LEVINE
        J.A.
I agree

[5]

FINCH
        C.J.B.C.
:  So ordered.

The Honourable Chief Justice Finch


COURT OF APPEAL
        FOR BRITISH COLUMBIA

Citation:

Hayes
                Forest Services Ltd. v. Krawczyk,

2005 BCCA
            17

Date: 20050113

Docket: CA031235

Between:

Hayes Forest
      Services Limited

Respondent

(P
laintiff
)

And

Betty Krawczyk

Appellant

(
Defendant
)

And

The Attorney General of British Columbia

Intervenor

Before:

The Honourable
            Madam Justice Rowles

The Honourable
            Mr. Justice Low

The Honourable
            Madam Justice Levine

A.C. Ward
            and L.J. Tessaro

Counsel for the Appellant

P.U.W. Ewert,
            Q.C.

Counsel for the Respondent

Written
            submissions received

Place and
            Date of Hearing:

Vancouver, British Columbia

25 November 2004

Place and
            Date of Judgment:

Vancouver, British Columbia

13 January 2005

Written
              Reasons by
:

The Honourable
            Mr. Justice Low

Concurred
              in by:

The Honourable
            Madam Justice Rowles

The Honourable
            Madam Justice Levine

Reasons for Judgment of the Honourable Mr. Justice Low:

[1]

At
      the commencement of the hearing of this appeal from an order convicting
      the appellant of criminal contempt of court in civil proceedings, counsel
      for the Crown raised a preliminary objection to the court hearing the appeal
      because it was commenced as a civil appeal and ought to have been commenced
      as a criminal appeal.  Without becoming seized of the appeal, we adjourned
      the hearing to receive written submissions on the objection.  Those submissions
      are now in hand.

[2]

The
      filing and serving of a notice of appeal, or a notice of application for
      leave to appeal where required, is the procedural method by which litigants
      bring civil appeals to this court: see s. 14 of the
Court of Appeal
      Act
,
R.S.B.C. 1996, c. 77.  The rules of this court provide in
      R. 11 for the bringing of a civil appeal by filing and serving a notice
      of appeal in Form 7 found in Appendix A to the rules.  It is that form
      the appellant filed and served to initiate this appeal.  The appellant
      later filed an amended notice of appeal using the same form but I will
      refer to them collectively as the notice of appeal.

[3]

The
      position of the Crown is that the notice of appeal filed by the appellant
      is a nullity.  The Crown says that she must start all over again with the
      proper notice of appeal in a fresh appeal.  The Crown says it will consent
      to the necessary extension of time.

[4]

It
      is clear to me that the appellant employed the wrong notice of appeal.  She
      ought to have filed and served a Notice of Appeal or Application for Leave
      to Appeal in Form 1 of the criminal appeal rules of this court as prescribed
      by R. 3(1) and R. 5(1) therein.  That is the form to be used in bringing
      a conviction or sentence appeal following conviction for an indictable
      offence.  Although criminal contempt of court is not an indictable offence,
      under certain sections of the
Criminal Code of Canada
, R.S.C.
      1985, c. C-46, such conviction is subject to the appeal provisions for
      indictable offences found in the
Code
.

[5]

Section
      9 of the
Code
abolishes common law criminal offences but
      adds the following proviso: "... but nothing in this section affects
      the power, jurisdiction or authority that a court ... had ... to impose
      punishment for contempt".  Section 10 authorizes an appeal from a
      conviction for contempt of court and makes Part XXI of the
Code
applicable "with
      such modifications as the circumstances require".

[6]

Part
      XXI of the
Code
, commencing at s. 673, governs appeals of
      indictable offences.  Section 674 provides:

674.  No
      proceedings other than those authorized by this Part and Part XXVI shall
      be taken by way of appeal in proceedings in respect of indictable offences.

(Part XXVI is concerned with extraordinary remedies
      and has no application to the present discussion.)  It follows that the
      only type of appeal authorized by law from a conviction for criminal contempt
      is by way of an indictable offence appeal under the
Code
.  McLachlin
      J. (as she then was) made a similar observation in
United Nurses
      of Alberta v. Attorney-General for Alberta et al
. (1992), 71 C.C.C.
      (3d) 225, when she said at p. 260: "I note that s. 686 clearly applies
      to the case at bar since appeals from conviction of criminal contempt are
      provided by s. 10(3) of the Criminal Code ...".  Section 686 is in
      Part XXI of the
Code
and is concerned with the powers of
      a court of appeal upon the hearing of appeals from convictions for indictable
      offences.

[7]

Section
      678 of the
Code
requires an appeal or application for leave
      to appeal to be given "in such manner and within such period as may
      be directed by rules of court" with the proviso that the appeal period
      may be extended by the appeal court or a judge thereof.

[8]

In
      this court, the applicable rules are the
British Columbia Court of
      Appeal Criminal Appeal Rules, 1986
.  As already noted, they prescribe
      the forms to be used for the commencement of criminal appeals.  Rule 2
      is of importance to the present issue.  It reads:

2(1)  The Court of
      Appeal Rules (Civil), B.C. Reg. 303/82, as amended from time to time, apply
      to appeals on matters that are not expressly provided for in these rules.

(2)   The court may
      issue practice directives on any matter respecting appeals.

(3)   On an appeal,
      the court or a justice may give all directions respecting the conduct of
      the appeal that it or he considers necessary.

(4)   The court and a justice have, in relation to an appeal, all of
      the powers that they have under the
Court of Appeal Act
, R.S.B.C.
      1996, c. 77, and the rules made under that Act, with any necessary changes
      as may be applicable.

[9]

The
      appellant does not concede that there is anything wrong with the notice
      of appeal her counsel filed but contends that if it is defective the defect
      is no more than a curable irregularity.  She refers to s. 19 of the
Court
      of Appeal Act
(incorporated into the
Criminal Appeal Rules
by
      R. 2(4) set out above):

19(1)An appeal is not defeated
      by an irregularity or preliminary procedural objection.

(2)   If
      an irregularity or procedural error has occurred, the court may order that
      the appeal be heard and may impose conditions, including the granting of
      an adjournment and the payment of costs, that the court considers appropriate.

[10]

In
      her factum, the appellant raises only one ground of appeal stated very
      broadly as follows: "... [t]he learned trial judge erred in finding
      that the procedure by which the Appellant was arrested, "charged",
      detained in custody and tried did not violate her fundamental rights and
      freedoms as guaranteed by the
Canadian Charter of Rights and Freedoms
"
.
I
      understand part of her argument to be that this is a civil action and the
      contempt proceeding was conducted by the Attorney General of British Columbia
      who was not a party to it.  In the factum, her counsel concedes that, as
      guardian of the public interest, the Attorney General "has traditionally
      been permitted to intervene and take carriage of contempt proceedings".  But
      the appellant complains that there was no formal charging document and
      that the presentation of evidence by affidavit with a right of cross-examination
      of the affiants somehow breached her rights under the
Charter
.
I
      fail to see in this argument or in the written submission made on behalf
      of the appellant in response to the Crown's preliminary objection any basis
      for concluding that the trial of the contempt proceeding was civil in nature
      rather than criminal.  As I state above, this is a criminal appeal under
      Part XXI of the
Code
and the appellant filed the wrong notice
      of appeal.

[11]

The
      Crown cited no authority that discusses the difference between the two
      procedural extremes of nullity and curable irregularity.  In
Hewgill
      v. Chadwick et al.
, (1899) 18 P.R. 359, Ferguson J. made the following
      useful statement:

25    An irregularity has been said to consist either in omitting to
      do something that is necessary to the due and orderly conducting of a suit,
      or doing it in an unreasonable time or improper manner; a defect, it is
      true, but one that does not take away the foundation or authority for the
      proceeding, or apply to its whole operation.  This distinguishes an irregularity
      from a nullity, which is the highest degree of an irregularity, in the
      most extensive sense of that term, and is such a defect as renders the
      proceeding in which it occurs totally null and void and of no avail whatever,
      and incapable of being made so.  Again, where the proceeding adopted is
      that prescribed by the practice of the Court, and the error is merely in
      the manner of taking it, such an error is an irregularity.  But where the
      proceeding itself is altogether unwarranted and different from that which,
      if any, ought to have been taken, then the proceeding is a nullity.

[12]

I
      think the conclusion that proceedings are a nullity should be reached sparingly.  In
      the present case, the appellant had a genuine intention to appeal and she
      appealed to the right court within the time limited for appeals which is
      the same for both criminal and civil appeals.  The document by which the
      appellant initiated her appeal was not the correct document but in all
      other respects she properly commenced her appeal, including timely service
      upon the Crown.  In my opinion, it is more correct to say that the error
      made by the appellant was at the low end of the continuum and does not
      remove the foundation or the authority for the appeal so as to render the
      notice of appeal a nullity.  I conclude that the concept of nullity is
      more applicable to court documents such as a writ or notice of appeal issued
      or filed in the wrong court.  An example would be the bringing of an appeal
      from a conviction in Provincial Court of a summary offence directly to
      this court instead of to the Supreme Court of British Columbia as required
      by law.  In that situation, this court would be without jurisdiction and
      the notice of appeal would be a nullity.

[13]

I
      prefer to think of the use of the wrong notice of appeal form in the circumstances
      of this case as an irregularity that can be cured.  The error that occurred
      was merely a matter of form, not a matter of substance.  It does not go
      to the court's jurisdiction.  A declaration that the notice of appeal is
      a nullity is, for me, too rigid an application of the procedural rules.  It
      would be what Dickson J. (as he then was) described as the "punctilio
      of an earlier age" in a slightly different context in
R. v.
      Sault Ste. Marie (City)
, [1978] 2 S.C.R. 1299 at p. 1307.

[14]

Under
      s. 19(1) of the
Court of Appeal Act
the irregularity does
      not defeat the appeal.  Under s. 19(2) we may order that the appeal be
      heard upon conditions we consider appropriate.  I would order that the
      appeal be heard after the appellant has filed in this appeal the proper
      notice of appeal on a
nunc pro tunc

basis.

The Honourable
Mr. Justice Low

I Agree:

The Honourable
Madam Justice Rowles

I Agree:

The Honourable
Madam Justice Levine