1998 Alberta Court of Appeal Decision

Issue 1 : Should the Government be allowed to introduce fresh evidence in this appeal?

[20] The Government brings two applications to adduce fresh evidence.

(a) First Application

[21] In response to PSBAA and ASBA's assertions that the funding scheme discriminates under s. 17(2) of the Alberta Act, the Government has consistently maintained that the Framework's funding restrictions apply equally to all school boards, including those that have opted out of the ASFF. It has further insisted that the failure of any board to comply with the restrictions contained in the Framework will result in a reduction in grant money available from the General Revenue Fund. At trial, Government witnesses testified that this was the intended application and effect of the Framework. The Government also attempted to introduce a letter from the Deputy Minister of Education describing a non-compliance provision respecting the use of the funds received under the Framework. However, the letter was ruled inadmissible and no attempt was made by counsel for the Government to call its author.

[22] As stated above, the Framework itself does not distinguish between separate, public and opted out boards. Nor does it indicate that non-compliance with its terms will result in a reduction of grant money. Consequently, ASBA and PSBAA argue that the Framework and the non-compliance provision do not apply to the locally requisitioned monies raised by opted out boards. This forms the basis of their discrimination argument under s. 17(2) of the Alberta Act.

[23] The fact that separate school boards campaigned so vigorously for the right to opt out of the ASFF is said to provide further support for PSBAA and ASBA's interpretation of the Framework's application. If the Framework was intended to apply to revenues requisitioned directly by opted out boards, why seek the right to opt out?

[24] Although we fail to see how it advances the discrimination argument, ASBA also seems to go so far as to say that the Government's non-compliance policy does not apply to any board because it was not formally articulated in a regulation. Whether in the form of a policy or regulation, the issue to be determined is whether the Government has discriminated in an unacceptable manner.

[25] As to the evidence the Government adduced at trial pertaining to the Framework's application, ASBA claims that the evidence of Gary Zatko, the Assistant Deputy Minister of the Planning, Information and Financial Services Divisions of Alberta Education, confirms that the Framework does, not apply to the local requisition monies of opted out boards. ACSTA argues that his testimony was equivocal on the issue. While Mr. Zatko initially suggested that separate boards could opt out of the Framework and while he acknowledged that the Framework did not specifically say that its provisions applied to an opted out board's declared ratepayer assessment base, his subsequent testimony clarified his position on the issue. On re-examination, he referred to a hypothetical analysis that he had prepared to show the Framework's operation (see, Exhibit "H for Identification"). That exhibit coupled with Mr. Zatko's testimony demonstrate that the Government's intent was that the Framework's terms would apply to the property assessment monies and grant revenues received by all boards. The evidence also shows how the non-compliance policy would work. According to Mr. Zatko's evidence, neither the Framework's conditions nor the penalties distinguish between public, separate and opted out boards. [See, A.B. Vol. 5, at 1098-1113.] In our view, his testimony is not equivocal. However, we agree that, aside from the hypothetical analysis, there was no documentary evidence presented at trial to show-that the Framework's conditions apply to an opted out board's declared ratepayer assessment base.

[26] The Government now seeks to introduce fresh evidence to provide documentary proof that the Framework is intended to apply equally to all boards and to demonstrate that a written penalty for non-compliance exists. The two documents at issue in this application are:

Funding for School Authorities in the 1995-96 School Year (Exhibit "A"), and
an excerpt from Funding for School Authorities in the 1996-97 School Year (Exhibit "B").

[27] The first document was released by Alberta Education on September 1, 1995, before judgment was entered at trial. The second was released in April 1996. These documents explain what funding is available to school authorities and how it can be obtained. They expressly state that the Framework applies to all public and separate school boards in the province. Thus, they would address the argument that there is no indication in the Framework of any intent to apply the restrictions to funds requisitioned by opted out boards. In addition, these exhibits make it clear that when a board fails to meet certain conditions prescribed under the Framework, the board's grant payment out of the province's general revenues will be adjusted accordingly.

[28] The test that is generally applied to determine whether fresh evidence should be admitted on appeal is whether:

the evidence could not have been obtained for use at trial even with the exercise of reasonable diligence; and
the evidence, if introduced, would be practically conclusive.

Gorrie v. Nielsen (No. 1) (1988), 92 A.R. 164 (C.A.).

[29] The strict application of this test in the case at bar raises some difficulties for the applicant. In its affidavit, the Government admits that Exhibit "A" was released on September 1, 1995. Although the trial of this action was completed at the end of June 1995, the trial judge did not issue his Reasons for Judgment until November 28, 1995, and Formal Judgment was not entered until January 1996. Accordingly, the evidence came into existence at a time when the trial judge was still seized with the action. We reject the Government's contention that once final submissions were completed and the case had been adjourned for judgment, it had no obligation to apply to re-open the case and introduce the evidence. On applications to admit fresh evidence on appeal, this Court will look at whether or not the evidence could have been obtained and might have been introduced by reasonable diligence at any time prior to the final judgment. The approach suggested by the Government would allow a litigant who is dissatisfied with a judgment to seek to vary it by introducing evidence they had chosen not to present at trial. (See, Becker Milk Co. Ltd. et al v. Consumers' Gas Co. (I 974), 2 0. R. (2d) 554 (C.A.).) As a result, we are unable to conclude that the first branch of the fresh evidence test has been satisfied for Exhibit "A".

[30] In no way do we intend to suggest that the Government acted in bad faith by failing to bring the new policy to the trial court's attention. The Government did bring an application in December 1995 which, inter alia, asked the trial judge to reconsider his reasons and decide whether the Framework's restrictions applied to taxes requisitioned by school boards. In its Notice of Motion, the Government claimed that all the evidence necessary to decide the issue was before the court. It is puzzling why the Government chose not to present Exhibit "A" to the court at that time.

[31] No similar problem arises with respect to Exhibit "B". It was released in April 1996 and is essentially an incomplete duplicate of Exhibit "A".

[32] As to the second part of the test, both exhibits show that the Framework's restrictions apply to all school boards with the same consequences for non-compliance. To some extent, this is also evident from the decision of this Court in the Capital Reserves case, supra. The facts of that case demonstrate that at least some of the Government's funding conditions were intended to apply equally to all boards. However, neither that case nor the fresh evidence are necessarily enough to lay the discrimination argument to rest. There remains the issue of the constitutionality of the Framework under s. 17(l) of the Alberta Act. The Framework may be unconstitutional in so far as it purports to impose restrictions on separate school board spending. On this basis, we must conclude that, if admitted, Exhibits "A" and "B" would not be practically conclusive of an issue on appeal.

[33] Accordingly, based on the strict application of the test for fresh evidence, the Government's first application should fail for both exhibits.

[34] However, the two part test is nothing more than a general rule. On occasion, this Court has seen fit to adopt a more flexible approach to the admission of fresh evidence, even if that evidence is not practically conclusive. A case in point is Black & Company v. Law Society of Alberta (I 985), 67 A.R. 244 (C. A.). At issue in that case was the constitutionality of Law Society rules restricting the mobility rights of lawyers involved in interprovincial law firms. The fresh evidence consisted of proof of publication of rules issued by the Law Society of Upper Canada and a copy of a report relating to interprovincial law firms. The documents were not available at the time of trial and were submitted on appeal in relation to the analysis under s. 1 of the Charter. The court admitted the evidence, saying that it was appropriate to relieve the applicant of the second arm of the fresh evidence rule in constitutional cases "in order to permit reception of up-to-the-minute social facts. " (At 245.)

[35] Even though the fresh evidence under the first Notice of Motion does not satisfy the traditional rule for the admission of new evidence on appeal, based on the particular circumstances before us, we are prepared to admit both exhibits. Underpinning the s. 17(2) argument (i.e., the discrimination issue) is the claim that, because of the Framework's silence on the issue, locally requisitioned funds collected by opted out separate school boards are not subject to the Framework's restrictions. The new evidence is tendered to show that this view may be unfounded. The application of the Framework to separate school boards is central to the discrimination issue, and the fresh evidence may be determinative of that issue to the extent that the Framework's provisions are constitutional as against separate schools. Therefore, because of the potentially determinative effect of the evidence on this appeal, we admit the new evidence. And in so doing, we are mindful of our subsequent unwillingness (set out later in these Reasons) to determine the constitutional validity of the Framework's restrictions vis-A-vis separate boards, despite the fresh evidence. Regrettably, we later recognize that the constitutional validity of the Framework's application may have to be relitigated in the future.

(b) Second Application

[36] The second motion is made in respect of three charts that were recently prepared by the Government. The evidence is said to be relevant to the consideration of the s. 17(2) issue. Specifically, the Government maintains that the charts demonstrate that the impugned funding scheme does not prejudicially affect the rights of separate school ratepayers within the meaning of s. 17(l) of the Alberta Act. On this basis, it is argued that the Framework's provisions apply equally to all boards. The charts compare:

the enrollment of separate and public school students from the 1993/94 school year to enrollment in the 1995/96 and 1996/97 school years;
the fiscal inequities for separate school boards in the 1993 tax year to fiscal inequities in the 1996 tax year; and
the administrative costs for Edmonton and Calgary separate school boards in the 1993/94, 1995/96 and 1996/97 school years.

[37] It is not clear to us whether this evidence was available at the time of trial. However, without deciding that issue, we are not satisfied that this evidence would be practically conclusive of an issue on appeal. The mere fact that the new scheme may reduce the fiscal inequities previously experienced by separate school boards does not necessarily mean that there is no prejudicial effect on the rights guaranteed by s. 17(l) of the Alberta Act. Because this evidence does little to resolve the discrimination issue, we are not prepared to admit it.

�