New Brunswick v. Rothmans Inc. et al.,

• Jurisdiction: New Brunswick
• Judge: Cyr, J.
• Citation: (2009), 344 N.B.R.(2d) 22 (TD),2009 NBQB 131
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Date: 05 May 2009

N.B. v. Rothmans Inc. (2009), 344 N.B.R.(2d) 22 (TD);

    344 R.N.-B.(2e) 22; 884 A.P.R. 22

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Temp. Cite: [2009] N.B.R.(2d) TBEd. MY.026

Renvoi temp.: [2009] N.B.R.(2d) TBEd. MY.026

Her Majesty the Queen in Right of the Province of New Brunswick (plaintiff) v. Rothmans Inc., Rothmans, Benson & Hedges Inc., Carreras Rothmans Limited, Altria Group, Inc., Philip Morris U.S.A. Inc., Philip Morris International, Inc., JTI-MacDonald Corp., R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco International Inc., Imperial Tobacco Canada Limited, British American Tobacco P.L.C., B.A.T. Industries P.L.C., British American Tobacco (Investments) Limited, and Canadian Tobacco Manufacturers' Council (defendants)

(F/C/88/08; 2009 NBQB 131; 2009 NBBR 131)

Indexed As: New Brunswick v. Rothmans Inc. et al.

Répertorié: New Brunswick v. Rothmans Inc. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Cyr, J.

May 14, 2009.

Summary:

Résumé:

New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers. New Brunswick filed a motion for case management, requesting a procedural timetable up to the setting down for trial of the action and an order providing for the electronic discovery of documents. The defendants who had attorned to the court's jurisdiction did not oppose case management. However, one defendant filed a motion (the conflict of interest motion) challenging the constitutionality, legality and ethical integrity of an alleged contingency fee agreement (CFA) entered into by New Brunswick with a consortium of lawyers hired to conduct the action. The defendants asserted that this raised a critical threshold question that had to be determined before any other aspect of the litigation.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at (2009), 340 N.B.R.(2d) 313; 871 A.P.R. 313, adjourned New Brunswick's motion pending the court's decision on the conflict of interest motion. In support of the conflict of interest motion, the defendants filed the affidavits of Professor H. Patrick Glenn, attaching his expert report (the Glenn Report) and Professor C. Hazard Jr., attaching his expert report (the Hazard Report). New Brunswick filed a motion asking the court to strike the affidavits or declare the reports inadmissible.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at 342 N.B.R.(2d) 171; 878 A.P.R. 171, denied the motion regarding the Glenn Report and granted the motion regarding the Hazard Report. Imperial Tobacco Canada Ltd. filed motions, seeking (1) production of redacted portions of the CFA, (2) an order striking references to foreign law contained in an affidavit, (3) leave to cross-examine three affiants, (4) production for inspection of permit applications submitted to the Law Society of New Brunswick and (5) variance of the procedural timetable.

The New Brunswick Court of Queen's Bench, Trial Division, denied motions 1, 2 and 3, granted motion 4 and agreed to modify the timetable, but not to the degree requested in motion 5.

Evidence - Topic 7002

Opinion evidence - Expert evidence - General - Acceptance, rejection and weight to be given to expert opinion - New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers, including Imperial Tobacco Canada Ltd. - The conduct of the action was contracted to a consortium of U.S., Ontario and New Brunswick lawyers under a contingency fee agreement (CFA) - Imperial Tobacco challenged the constitutionality, legality and ethical integrity of the CFA and filed the affidavit of Professor H. Patrick Glenn, attaching his expert report (the Glenn affidavit) in support - New Brunswick's motion to strike the Glenn affidavit on the basis that it adduced both domestic and foreign law was dismissed - Cyr, J., indicated that any reference to domestic and/or foreign law by the expert in order to develop his opinion respecting factual issues did not render the expert's evidence inadmissible - Imperial Tobacco moved to strike certain paragraphs of an affidavit filed by New Brunswick (the Sossin affidavit) on the basis that it contained inadmissible opinion evidence on foreign law - New Brunswick asserted that the Sossin affidavit specifically responded to the Glenn affidavit - The New Brunswick Court of Queen's Bench, Trial Division, denied the motion to strike - It would be unfair to New Brunswick to strike those portions of the Sossin affidavit while leaving the Glenn affidavit intact - Further, the court was not bound by such expert evidence and was entitled to give it whatever weight was appropriate - See paragraphs 31 to 35.

Evidence - Topic 7153

Opinion evidence - Prohibited opinions - Re legal conclusions - [See Evidence - Topic 7002 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers, including Imperial Tobacco Canada Ltd. - The conduct of the action was contracted to a consortium of U.S., Ontario and New Brunswick lawyers under a contingency fee agreement (CFA) - Imperial Tobacco challenged the constitutionality, legality and ethical integrity of the CFA - In preparation for the hearing of the CFA validity motion, New Brunswick filed an affidavit containing a copy of a redacted version of the CFA - Imperial Tobacco sought production of the edited portions of the CFA - In opposing the motion, New Brunswick asserted, inter alia, that the CFA had already been determined to be privileged in proceedings that took place under the Right to Information Act (Hayes v. New Brunswick (Minister of Justice and Consumer Affairs) et al.) and that the matter was therefore res judicata - The New Brunswick Court of Queen's Bench, Trial Division, held that the matter was not res judicata - Imperial Tobacco was not a party to the proceedings in Hayes - Further, Grant, J., in Hayes, expressly noted that the court might be prepared to reconsider the issue in the context of a constitutional challenge to the CFA - See paragraphs 10 to 13.

Practice - Topic 3666

Evidence - Affidavits - Striking out - Irrelevant or improper matters - [See Evidence - Topic 7002 ].

Practice - Topic 3687

Evidence - Affidavits - Use of - Cross-examination (incl. transcripts) - New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers, including Imperial Tobacco Canada Ltd. - The conduct of the action was contracted to a consortium of U.S., Ontario and New Brunswick lawyers under a contingency fee agreement (CFA) - Imperial Tobacco challenged the constitutionality, legality and ethical integrity of the CFA - In preparation for the hearing of the CFA validity motion, New Brunswick filed the Spinney affidavit, which contained a copy of a redacted version of the CFA; the Sossin affidavit, which provided expert opinion on the issues at stake when an attorney general retained outside counsel under a CFA; and the Richard affidavit, in which Richard, the Executive Director of the Law Society of New Brunswick, stated that the U.S. lawyers who were part of the consortium had been granted permits to act as foreign legal consultants in New Brunswick - Imperial Tobacco sought leave under Rule 39.03 to cross-examine Spinney, Sossin and Richard on their affidavits - The New Brunswick Court of Queen's Bench, Trial Division, denied the motion - The court's power under Rule 39.03 was discretionary and was to be used sparingly - The party seeking to cross-examine had the onus of establishing the existence of special circumstances or providing sufficient reasons why it was required - Imperial Tobacco had failed to do so - Disagreement with the facts contained in an affidavit was not sufficient - Further, there were no ambiguities or inconsistencies within the affidavits - See paragraphs 36 to 47.

Practice - Topic 4571.3

Discovery - What documents must be produced - Documents referred to in affidavit - New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers, including Imperial Tobacco Canada Ltd. - The conduct of the action was contracted to a consortium of U.S., Ontario and New Brunswick lawyers under a contingency fee agreement (CFA) - Imperial Tobacco challenged the constitutionality, legality and ethical integrity of the CFA - In preparation for the hearing of the CFA validity motion, New Brunswick filed the Richard affidavit, in which Richard, the Executive Director of the Law Society of New Brunswick, stated that the U.S. lawyers who were part of the consortium had been granted permits to act as foreign legal consultants in New Brunswick - Imperial Tobacco sought production under Rule 31.04 of complete copies of the permits and any other documents concerning the permit applications in New Brunswick's possession and/or control - New Brunswick asserted that the request was nothing more than a "fishing expedition" - The New Brunswick Court of Queen's Bench, Trial Division, granted the motion - The delivered, completed permit applications were relevant and fell within the wording of Rule 31.04(1)(a) as being documents specifically mentioned in an affidavit filed on behalf of a party to the proceedings - Further, the legal status of the foreign lawyers and the allegation of their unauthorized practice of law in New Brunswick had been raised as live issues in the CFA validity motion - New Brunswick failed to satisfy the court that it would suffer serious prejudice if the motion was granted - See paragraphs 48 to 67.

Practice - Topic 4577

Discovery - What documents must be produced - Privileged documents - Attorney-client communications (legal advice privilege) - New Brunswick commenced an action under the Tobacco Damages and Health Care Costs Recovery Act for the recovery of tobacco-related health care costs against a number of tobacco product manufacturers, including Imperial Tobacco Canada Ltd. - The conduct of the action was contracted to a consortium of U.S., Ontario and New Brunswick lawyers under a contingency fee agreement (CFA) - Imperial Tobacco challenged the constitutionality, legality and ethical integrity of the CFA - In preparation for the hearing of the CFA validity motion, New Brunswick filed an affidavit containing a copy of a redacted version of the CFA - Imperial Tobacco sought production of the edited portions of the CFA - In opposing the motion, New Brunswick asserted, inter alia, solicitor/client privilege over the undisclosed portions of the CFA and, further, that those portions were irrelevant, unrelated to and severable from the issues before the court on the CFA validity motion - The New Brunswick Court of Queen's Bench, Trial Division, denied the motion for production - The CFA was a communication between solicitor and client that entailed the seeking or giving of legal advice - The first two prerequisites for establishing solicitor/client privilege were clearly met - The third prerequisite, an intention to keep the communication confidential, was also met, despite the voluntary disclosure of almost the entire CFA - Until recently, New Brunswick had decided not to produce any part of the CFA - There was no intention to waive privilege in New Brunswick's disclosure for the purpose of defending the CFA motion - Nor was full disclosure required for the sake of fairness and consistency - The partial disclosure was neither misleading nor otherwise unfair to Imperial Tobacco - See paragraphs 14 to 29.

Practice - Topic 4582

Discovery - What documents must be produced - Privileged documents - Prior disclosure - [See Practice - Topic 4577 ].

Practice - Topic 4585

Discovery - What documents must be produced - Privileged documents - Waiver - [See Practice - Topic 4577 ].

Préclusion - Cote 386

Préclusion par chose jugée - Exception de la chose jugée opposée aux procédures ultérieures - Questions tranchées dans des procédures antérieures (y compris la validité des lois) - [Voir Estoppel - Topic 386 ].

Preuve - Cote 7002

Témoignages d'opinion - Preuve d'expert - Généralités - Acceptation ou rejet d'une opinion d'expert ou poids à lui donner - [Voir Evidence - Topic 7002 ].

Preuve - Cote 7153

Témoignage d'opinion - Opinions interdites - En matière de conclusions de droit - [Voir Evidence - Topic 7153 ].

Procédure - Cote 3666

Preuve - Affidavits - Annulation - Aspects non pertinents ou inappropriés - [Voir Practice - Topic 3666 ].

Procédure - Cote 3687

Preuve - Affidavits - Utilisation - Contre-interrogatoire (y compris transcriptions) - [Voir Practice - Topic 3687 ].

Procédure - Cote 4571.3

Enquête préalable - Documents à produire - Documents mentionnés dans un affidavit - [Voir Practice - Topic 4571.3 ].

Procédure - Cote 4577

Enquête préalable - Documents à produire - Documents privilégiés - Communications avocat-client (privilège de la consultation juridique) - [Voir Practice - Topic 4577 ].

Procédure - Cote 4582

Enquête préalable - Documents à produire - Documents privilégiés - Divulgation antérieure - [Voir Practice - Topic 4582 ].

Procédure - Cote 4585

Enquête préalable - Documents à produire - Documents privilégiés - Renonciation au privilège - [Voir Practice - Topic 4585 ].

Cases Noticed:

Hayes v. New Brunswick (Minister of Justice and Consumer Affairs) et al. (2008), 334 N.B.R.(2d) 80; 858 A.P.R. 80 (T.D.), refd to. [para. 10].

Stamper and Di Domenicantonio v. Canadian National Railway Co. (1985), 63 N.B.R.(2d) 342; 164 A.P.R. 342 (C.A.), refd to. [para. 13].

Solosky v. Canada, [1980] 1 S.C.R. 821; 30 N.R. 380, appld. [para. 15].

S. & K. Processors Ltd. v. Campbell Avenue Herring Producers Ltd. et al., [1983] 4 W.W.R. 762 (B.C.S.C.), refd to. [para. 23].

New Brunswick v. Rothmans Inc. et al. (2009), 342 N.B.R.(2d) 171; 878 A.P.R. 171 (T.D.), refd to. [para. 32].

Butternut Hill Farms Inc. v. Royal Bank of Canada (2008), 328 N.B.R.(2d) 305; 841 A.P.R. 305 (T.D.), refd to. [para. 41].

Board of Trustees of the City of Saint John Employee Pension Plan et al. v. Ferguson, [2009] N.B.R.(2d) Uned. 28 (T.D.), refd to. [para. 42].

Kay v. Kay (1999), 215 N.B.R.(2d) 291; 551 A.P.R. 291 (C.A.), refd to. [para. 61].

Counsel:

Avocats:

Philippe J. Eddie and Robin Ryan-Bell, for the plaintiff;

Thomas G. O'Neil, Q.C., and Deborah A. Glendinning, for the defendant, Imperial Tobacco Canada Limited.

These motions were heard on May 5, 2009, by Cyr, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following decision on May 14, 2009.