open - Appraisal Institute of Canada

The Value of the AIC 

Designation 

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OAMREA 

7 October 2011 

Strategic Bargaining 

Duty of Expert & Complaints in Litigation 

Presented by: 

Robert Patchett 

AIC Counsellor, Professional Practice, 

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Strategic Bargaining 

In real estate municipalities deal with many parties when it 

comes to how they acquire, use or dispose of real estate 

assets. Real estate is typically purchased and sold at fair 

market value. In circumstances that involve expropriation 

there are other factors that come into play. During these 

negotiations is it appropriate to submit a complaint to a 

professional body regarding the conduct of an expert. 

This session will discuss the concept of immunity afforded by 

courts to experts in litigation, and the evolution of the 

expert’s duty in Ontario. At the end, you should have a 

better understanding of policy considerations when 

contemplating submitting a formal complaint. 

© 2011 Robert W. Patchett, All rights Reserved.

http://www.youtube.com/watch?v=Ji4gsInXek0 

Go for the full appraisal and not just a drive by, or desk top, 

here is why. 

© 2011 Robert W. Patchett, All rights Reserved. 

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The Appraisal Institute of Canada 

• National professional association established in 1938. 

• A self-governing, self-regulating body. 

• Accredits and represents some 5,000+ AACIs, CRAs, 

Candidates and Students. 

• National standards-setter for professional appraisal 

practice. 


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The Value of the designation 

• The Institute is: 

– A relevant player in the marketplace, recognized as the 

leader in providing real estate valuation advice and 

opinions. 

– Responding to the demands of our stakeholders and 

the marketplace 

• AIC designated members: 

– Are recognized by the Courts and treated as experts by 

the Courts 

– Hold key management positions in both the public and 

private sector 


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AIC Responsible for the Accreditation of 

AIC Designated Members 

• Canadian Residential Appraiser (CRA) 

• Accredited Appraiser Canadian Institute (AACI) 


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Outline 

Changes to Expert Duty in Ontario 

Lessons Learned – Courts views of Experts 

Expert Immunity 

Way Ahead... 


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Ontario Changed the Rules 2010 

• Changes are Mandatory 

• Changes affect the content of appraisal reports 

• Changes require disclosure of instructions provided to 

appraiser 

• Changes require appraiser to sign a special certificate 

• Changes affect the timing of delivery of expert appraisal 

reports 

• The changes affect how evidence (expert report) will be 

presented not only to Courts but to many administrative 

tribunals: ELTO for example 


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Summary of Changes 

Briefly summarized, the new rules pertaining 

to expert witnesses provide: 

• Overriding duty to the court 

• Can be forced to meet to narrow issues 

• Joint statement by experts 

• Earlier deadlines for service 

• More information and substance required in 

report 


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Duty of the Expert 

4,1.01(1) It is the duty of every expert engaged by or 

on behalf of a party to provide evidence in relation to a 

proceeding under these rules, 

(a) to provide opinion evidence that is fair, objective and nonpartisan; 

(b) to provide opinion evidence that is related only to 

matters that are within the expert's area of expertise; 

and 

(c) to provide such additional assistance as the court 

may reasonably require to determine a matter in issue. 


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Duty Prevails 

(2) The duty in subrule (1) prevails over any 

obligation owed by the expert to the party by whom or 

on whose behalf he or she is engaged. 

BC Supreme Court Rules, Rule 11-2 states slightly differently 

to expressly impose a duty on expert witnesses “to assist 

the court” and “not to be an advocate for any party” 


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Expert Duty 

This Rule does not amend the existing standards for expert 

witnesses in civil matters that are handed down from the UK 

based on The Ikarian Reefer judgements and amplified by 

Canadian Courts 


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Why Expert required 

SCC set out the criteria for determining admissibility of expert 

evidence in court proceedings: 

• Relevance 

• Necessity in assisting the trier of fact 

• The absence of any exclusionary rule 

• A properly qualified expert 

• “...a cost benefit analyse... in terms of its impact on the trial 

process. Evidence... May be excluded on this basis, if its 

probative value is overborne by its prejudicial effect, if in 

effect, if it involves an inordinate amount of time which is 

not commensurate with its value or if it is misleading in the 

sense that its effect on the trier of fact, particularly a jury, is 

out of proportion to its reliability. ... The reliability versus 

effect factor has special significance in assessing the 

admissibility of expert evidence 

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© 2011 Robert W. Patchett, All rights Reserved.

Role of Expert 

• Expert evidence presented to the Court should be, and 

should be seen to be, the independent product of the expert 

uninfluenced as to form or content by the exigencies of 

litigation 

• An expert witness should provide independent assistance to 

the Court by way of objective unbiased opinion in relation to 

matters within his [or her] expertise 

• An expert witness ... should never assume the role of an 

advocate. 


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• An expert witness should state the facts or assumptions 

upon which his [or her] opinion is based. He [or she] should 

not omit to consider material facts which could detract from 

his [or her] concluded opinion 

• An expert witness should make it clear when a particular 

question or issue falls outside his [or her] expertise 

• If an expert's opinion is not properly researched because he 

[or she] considers [there to be] ... insufficient data 

…available, then this must be stated with an indication that 

the opinion is no more than an provisional one ... 

Frazer v. Haukioja, 2008 CanLll 42207 (O.S.C.), 


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Rules of Civil Procedure 

• Rule 4.1.01 Duty of Expert 

• Rule 53.03(2.1) Content of Expert Report 

• Form 53 Acknowledgement of Expert Duty 

• Other 

• Delivery of report: 90 and 60 days before pre-trial 

• Expert Meeting: Court ordered, focus on joint 

statement, and Peer Review 

• Limitation on number of Experts 


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Sanctions Rule 53 

Sanction for Failure to Address Issue in Report or 

Supplementary Report 

(3) An expert witness may not testify with respect to an 

issue, except with leave of the trial judge, unless the 

substance of his or her testimony with respect to that issue is 

set out in, 

(a) 

(b) 

a report served under this rule; or 

a supplementary report served on every other party 

to the action not less than 30 days before the 

commencement of the trial. 


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The expert should be “a neutral observer who guides 

judges and juries through complicated evidence so 

that they can draw their own conclusions about the 

issues at hand” 

(Justice Dickson in R. v. Abbey) 


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Why Experts Fail 

• Flaw in methodology 

• Lack of reality/substance, including assumptions that do not 

appear reasonable 

• Inappropriate speculation 

• Conclusions and/or assumptions not supported by evidence 

at trial 

• Results do not appear reasonable based on common sense 

• Lack of objectivity 

• Other side’s expert more credible 

• Expert opines on the ultimate issue 

• Competing valuation theories 


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What Contributes to this Failure 

• Low expectation going to court 

• Allegiance to the client and/or influence by the client 

• Inadequate time and resources for the expert 

• Unreasonable or conflicting expectations of the expert 

• “Wrong” expert selected for the case 

• Lack of court experience by the expert 

• Expert report or testimony is poorly explained and/or too 

technical for the lay person 

• Expert underestimates level of scrutiny to which report will 

be subjected 

• Client and Counsel Bias (undue influence) 


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Commentary – Too many irrelevant 

experts 

“As well as being concerned about the proliferation of offering 

expert witnesses in the field of junk science, we should also 

be concerned about the proliferation of unnecessary expert 

witnesses who distort the process especially when their 

opinions have no bearing or a twisted bearing on the 

evidence in the case” 

Pente Investiment Management Ltd. V. Schneider Corp., [1998] O.J. No. 6387 


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Inappropriate “speculation” 

Similar to assumptions, an element of speculation is required 

by an appraiser in certain cases in order to complete their 

engagement. To clarify the difference, speculation is 

defined as “Reasoning based on inconclusive evidence; 

conjecture or supposition”*, rather than conclusions based 

on assumptions these are conclusions based on guesses. 

*thefreedictionary.com 

“based on my knowledge and experience” which an appraiser 

can neither prove nor disprove... 


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“ The Supreme Court of Canada in Athey v. Leonati, observed 

that future events need not be proved on a balance of 

probabilities. A future possibility will be given consideration 

when it is “a real and substantial possibility and nor mere 

speculation” (para 27)” 

Doe v. O’Dell [2003] O.J. No 3546 

This comment suggests that a framework for exercising 

judgment when considering hypothetical outcomes is 

required. If there is a choice of having to make one or 

another guess, the expert should calculate using both 

scenarios and reconcile them indicating the reasons for the 

guess work. 


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Conclusions not supported by evidence 

“The city’s expert witness assessed Canadair’s land as if it 

were a medium sized block of land and therefore likely to be 

sold for immediate high utilization. ...In addition, as 

mentioned above, Canadair’s land is not vacant but is 

encumbered with depreciated buildings. I do not believe 

that by agreeing with the City on the value of its buildings 

Canadair agreed to have its land assessed as if it were 

vacant when in fact it is not” 

Saint-Laurent (City) v. Canadair Ltd., [1978] 2 S.C.R. 79 


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Lack of objectivity 

“... A contingency fee makes [expert] a co-venturer in the 

litigation. While he may not appreciate that result, the fact is 

that he had lost his neutrality and objectivity” 

Bank of Montreal v. Citak, [2001] O.J. No. 1096 


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Advocacy 

In Pente v. Schneider, the judge criticized the expert 

witnesses for advocacy: 

“... The reports of two witnesses in this case were to my view 

an echo of Captain Collins in this case... Expert evidence 

takes on the appearance of advocacy dressed up as expert 

opinion” 


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Objectivity and its opposite, Advocacy, are issues about which 

the expert should not only be aware, but take steps to 

prevent. In cases where objectivity is compromised, the 

expert’s evidence and testimony will be disregarded 


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Other Expert more credible 

In Saint-Laurent (city) v. Canadair ltd., the courts rejected the 

city expert and adopted that of Canadair: 

“If the Court of Appeal was justified in intervening and 

dismissing the municipal assessment, was it right in 

adopting the valuation of Canadair’s expert witness? This 

Court is of the opinion that this was the only valuation 

remaining and that there was no reason to reject it.” 

There being an issue with one expert’s report, the other 

expert’s was taken as the credible and reliable report. 


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Expert Review Report 

An expert was engaged only to review the expert report that 

had been prepared which had alleged fraud. As a result, 

the judge agreed that the initial report alleging fraud was 

deficient and adopted the criticism of the review report 

prepared by the other side’s expert. 

Beaudoin c. Banque de development du Canada, [2004] J.Q., no 705 


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Usurp role of Court/Judge 

The court will not accept the expert’s report and testimony as 

evidence where the expert has usurped the function of the 

Court. Experts must exercise case to avoid making legal 

judgements or in providing expert evidence that was not 

required to assist the trier of fact. 

“To review the bank’s procedures and to provide an opinion 

with respect to the standard of care of the bank’s 

procedures.” 

It is for the court to determine the standard of care and any 

breach thereof. Therefore understand your needs when 

engaging an appraiser at the outset. 


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In the case of valuations, the expert appraiser is required to 

use an appropriate methodology to predict or reach 

conclusions based on hypothetical situations. As a result, 

appraisers will often reach different conclusions based on 

these hypothetical assumptions. They will need to explain 

their assumptions and methodology in order for the Courts 

to determine whether they are reasonable and lead to the 

correct conclusions. These competing valuation theories will 

result in concerns and criticisms from judges. 


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Theory in Practice 

“On cross-examination, [the appraiser] accepted as correct 

statements from p. 18.4 of the Canadian edition of The 

Appraisal of Real Estate, to the effect that when nonmarket 

conditions are detected in a transaction, the sale can 

be used as a comparable, but only with great care. The text 

also cautions that the conditions of the sale must be 

adequately disclosed in the appraisal, and (at p. 19.5) that in 

the case of a distressed seller, an upward adjustment would 

probably be necessary to reflect the value the seller is not 

recapturing by accepting an expedient offer. The authors 

say: 

. . . If the sales used in the direct comparison approach reflect 

unusual situations, an appropriate adjustment (well 

supported by the market evidence) must be made for 

motivation or conditions of sale. Again, the circumstances of 

the sale must be explained in the appraisal report.” 


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“However, as I noted above, there were a number of 

comparables where, in his report, [the appraiser] failed to 

identify the parties to the transaction or identified only one of 

them, and did not identify insolvent sellers. The 

circumstances of the sales were not explained in [the 

appraiser's] report. The full picture became clear only on 

cross-examination, which disclosed sales involving bankrupt 

or insolvent sellers, non-arm’s length transactions and a 

sale by a mortgagee who had taken order absolute. This 

created further concern about whether I could have 

confidence in and safely rely on [this appraiser’s] opinions 

and conclusions concerning the market value of the 

Property.” 

Rainbow Country Estates Ltd. V. Whistler (Resort Municipality of), 2010 BCSC 300 (CanLII) 


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Expert Immunity - UK 

The UK Supreme Court has handed down judgment 

abolishing the immunity expert witnesses have enjoyed for 

over 400 years. In Jones v Kaney [2011] UKSC 13 the court 

held, by a majority of 5 to 2, that there is no justification for 

granting expert witnesses immunity from suit in relation to 

their participation in legal proceedings nor in relation to any 

views they express in anticipation of court proceedings. 


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Expert Immunity - USA 

In some States, expert witness immunity from civil liability is 

being ignored, due to the recognition that an expert has a 

responsibility to provide a “duty of care” towards the client. 

As a result, lawsuits most often fall under a breach of 

contract and negligence are being allowed. 


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Expert Immunity in Canada 

As a general rule Canadian Courts will take notice of 

developments in other common law jurisdictions. It is too 

soon to know if Canadian Courts will follow the UK and US 

paths. While Canadian Courts are unlikely to allow lawsuits 

against expert witnesses as quickly as in the USA, given the 

UK decision, an expert should consider the possibility that 

traditional immunity may no longer be certain. 


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The key will be to determine if the loss of immunity acts as an 

improvement to the system; 

• acts as a motivation for experts to testify truthfully and apply 

a higher level of care in their work product and testimony; 

• or detracts from the legal requirements for avoiding 

relitigating the underlying conflict, open and balanced 

testimony, and avoiding defamation of the expert caused by 

the filing of a suit or complaint, to determine 


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Issues in Expert Immunity 

• Discourage Experts from providing those services 

• Immunity is necessary to ensure that expert witnesses give 

full and frank evidence to the court (without fear of 

intimidation, or undue influence) 

• Protects from vexatious claims 

• Immunity from defamation claims arising out of their 

evidence 

• The duty of care to a client does not conflict with the 

overriding duty to assist the court, which may require the 

expert to act in a way which does not advance the client’s 

case. 

• Costs 

• Has been extended to disciplinary proceedings 


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Role of Expert 

An expert must: 

– maintain a degree of objectivity and impartiality 

with respect to the evidence that he or she is 

presenting 

– not provide unconditional support for counsel’s 

position 

– display objectivity 

– advise counsel of both the strengths and 

weaknesses in his or her case 

– not come across as defensive or argumentative 

– not be an advocate for his or her client 


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Courts/Judges are likely to take an unfavourable stand with 

any party or legal counsel that attempts to use court 

documents for an improper purpose during the course of 

litigation. 

• That is an expert appraisal report that forms the basis for a 

complaint .... 

• The court/judge may find that you are usurping his role 

• A professional complaint may not use same standard of 

care that might be decided by the judge in a civil/criminal 

matter [a reasonable belief an appraiser has met the 

reasonable appraiser standard] 

• This is an attack on credibility of expert which is role of 

judge to determine and to decide what weight if any are 

afforded an expert’s evidence. 


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Sanctions 

Possible sanctions for an expert who fails to adhere to his 

role: 

• Evidence will be given little or no weight 

• Reputation as a "hired gun“ / loss of credibility 

• Report to professional body (after the fact) 

• Costs award against non-parties. 


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ELTO 

Near and Medium term considerations: 

• Enhancing adjudicative expertise, capacity and 

excellence 

• Better use of skills of staff 

• Cross appointments 

• Establish stakeholder advisory committees 

• Joint Board rules 

• Mediation 


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Niagara Jet Boat Decision 

Expertise of OMB to decide issues 

Niagara River Coalition v. Niagara-on-the-Lake (Town), 

2010 ONCA 173 (CanLII) 

This decision binds all of the ELTO tribunals 

“I think that the role of experts in the planning process, 

and the scope of expert evidence at the Board, are 

important issues that we at the Board, and the 

municipal law community, need to think about, and 

come to terms with” 

Michael Gottheil, Executive Chair, ELTO – Notes to OBA 16 September 2010. 

http://www.elto.gov.on.ca/english/aboutelto/Presentations/presentations.html 

accessed 28 September 2011 


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The Way Ahead 

• Establish Terms of Reference for Appraisal Experts and 

have property owners acknowledge them when they retain 

an appraiser 

• Amend RFP to incorporate Expert Duty as set out in Rules 

of Civil Procedures (and report content and 

acknowledgement) (amend legislation?) 

• Consider Joint Retainers with home owner consent – 

speaks to terms of reference and instructions to appraisers 

• Training and Educate your Experts 

• Peer Review 

• Engage Chair ELTO 

• Professional Standards – CUSPAP 

• Professional Designations – skills on staff 


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Engage Counsel and Expert early. If they work together: 

• Clarify role and expectations of the proposed appraisal prior 

to accepting assignment – Scope of Work 

• Always plan as if “in contemplation of litigation” so that 

expert is not surprised 

• Set a budget 

• Expect the expert appraiser to discuss the terms of an 

assignment and to propose a more suitable engagement 

that avoids ‘confirm’, ‘validate’ objectives. 

• Joint Engagement with property owners, all sit down with 

appraiser at outset * Court appointed expert. 


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The Role And Duties Of An Expert 

What is expected from the expert (e.g. in assessment 

and quantification of a claim)? 

– Give evidence of the proper method to be 

adopted in assessing a claim and exceptions to 

that method 

– Give evidence of industry practice 

– Give opinions on cause and effect 

– Give factual evidence about appraisal techniques 

and practices 

– Give technical reasons why his or her opinion 

should be preferred over other experts 


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Role of Counsel & Staff Review* 

• Explain the issues to be addressed in the report by the 

appraisal expert 

• Provide copies of all relevant documents 

• Identify facts to be assumed by appraiser 

• Formulate questions to be answered by appraiser 

• Guiding the appraiser on report formatting 

• Review draft reports and suggest clarifications 

• I would like to acknowledge and give credit due in that this slide and those that follow were 

presented to AI-BC Conference by R.Glen Boswall, 1 October 2011 


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Explaining Dispute & Issues 

•The lawyer should fully explain: (a) the background to the 

lawsuit; (b) the issues in dispute; and (c) the purpose to be 

served by the proposed expert opinion. 

•This information allows the expert to spot issues, problems, 

and opportunities that the lawyer has not identified. 

•Seek the information if it is not provided! 


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Providing Documents 

•The lawyer should provide copies of all relevant and 

available documents in his or her possession or those within 

his or her power to obtain. 

•Tip: The expert should advise as to any additional 

documents the lawyer should obtain. 


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Identifying Facts to Assume 

•Expert report facts fall into two categories: (a) those to be 

assumed by the expert; and (b) those personally known or 

directly observed by the expert. 

•The lawyer should provide a detailed list of any facts the 

lawyer wants the expert to assume. 

•Tip: The expert should advise the lawyer of any other 

facts that should be assumed. 


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Identifying Facts to Assume (cont'd) 

•The expert may determine the existence of other facts 

outside the expert’s direct knowledge or observation (e.g. 

facts recorded in documents, hearsay, etc.). These are to be 

treated as assumed facts until independently proven in 

court. 


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Identifying Facts to Assume (cont'd) 

•Tip: While it is the lawyer’s job to prove the assumed facts, 

the expert can be of tremendous assistance by ensuring the 

source of every fact is recorded either in the report or 

elsewhere. 


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Formulating Questions 

•With the assistance of the expert, if necessary, the lawyer 

should formulate the questions that are to be answered in 

the expert’s report. 

•Tip: The expert should: (a) ensure he or she understands 

each question and its purpose; and (b) advise the 

lawyer about any other questions that should be asked 

and answered in the report. 


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Format Guidance 

•The lawyer should provide clear guidance with respect to the 

formatting of the report, particularly having regard to the 

Supreme Court Civil Rules. 

•Canadian Uniform Standards of Professional Appraisal 

Practice section 12.11 says the standards do not dictate the 

form, format or style of reporting. 


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Suggesting Report Clarifications 

•The lawyer should review draft reports and make appropriate 

suggestions as to clarification and presentation (but not the 

substance) of the opinion. 

•Tip: The expert is on his or her own on the witness 

stand. If the expert is not 100% behind the opinions as 

recorded in the report, the expert’s credibility can be 

destroyed for the case at hand and beyond. 


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If after all that 

The work remains sub-standard 

• Establish process of internal review to remove contractor 

from approved list 

• Establish policy of filing complaint (at end of legal 

proceedings) 

• Establish policy for civil action for negligence (at end of legal 

proceedings) 


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AIC Policy 

AIC Regulations Rule 5.43 

A complaint may be dismissed at any time where the AIC 

determines: 

• Frivolous, vexatious or trivial, or gives rise to an abuse of 

process 

• Complaint made in bad faith or filed for an improper purpose 

or motive 

• Substance of complaint was [or is] appropriately dealt with 

in another proceeding. 


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http://www.youtube.com/watch?v=Oy-WACMHad8 

Final thoughts on expropriation. 


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