Confidential Information

1
Confidential Information

• Professional Regulation, Professional Ethics and
  Legal Considerations
• Petroleum Geology 463 March 27, 2006
• Bob McDonald, P.Eng., LL.B.
• APEGS

2
Professions Professionalism

• Hallmarks of a profession
• Holding out to the public offer of public
  service
• Special skill a professional is assumed to
  possess
• Training and education
• Privilege or state recognition
• Self-disciplined group
• Freedom from purely personal considerations

3
Professional Regulation

• Engineering is regulated in every province and
  territory of Canada
• 12 associations/ordre
• Geoscience is regulated in 11 provinces and
  territories in Canada
• all except PEI and Yukon
• 7 associations are both engineering and
  geoscience
• Separate associations/ordre in Nova Scotia,
  Ontario and Quebec

4
Professional Legislation

• Each provincial or territorial association/ordre
  has its own legislation
• Legislation will be different, but similar, in
  each jurisdiction
• Registration and Licensure is subject to the
  legislation in each jurisdiction
• The Engineering and Geoscience Professions Act is
  the governing legislation in Saskatchewan

5
SaskatchewanGood Character Guideline

• Good character connotes moral and ethical
  strength
• Potential impediments to acceptance
• Record for professional misconduct, professional
  incompetence or contravention of professional
  statute / regulatory organization
• Commission of a criminal offence
• Found at fault in civil action relating to
  negligence in professional practice
• Willfully obtains or attempts to obtain
  registration by cheating, false statements or
  other impropriety

6
Professional IncompetenceProfessional Misconduct

• Members may be investigated and disciplined for
  professional incompetence and/or professional
  misconduct
• Professional misconduct includes
• Harmful to best interests of the public or the
  members
• Tends to harm the standing of the professions
• Breach of the Act or the Bylaws
• Failure to comply with an order of the
  investigation or discipline committees, or the
  Council

7
Code of Ethics

• Section 20 of the Regulatory Bylaws contains the
  Code of Ethics
• General statement of conduct and some specific
  commentary
• Members and licensees shall . . . act as faithful
  agents of their clients or employers, maintain
  confidentiality and avoid conflicts of interest

8
Conflict of Interest

• Engineers and geoscientists often deal with
  confidential information in the context of their
  employment and/or consulting activities
• The possession and knowledge of confidential
  information may establish the opportunity for
  creating a conflict of interest

9
Confidential Information

• From Chevron v. Home Leeson
• This litigation raises, again, serious and
  recurring questions concerning the obligations of
  senior employees who have transferred their
  employment while possessed of, or exposed to,
  industrial secrets of value to both employers
  which may have been confidential in origin.

10
Case Law Examples

• Pre-Cam Exploration Development v. McTavish
  (1966)
• Canadian Aero Services Ltd. V. OMalley (1973)
• Guyer Oil v. Fulton (1977)
• Chevron Standard Limited v. Home Oil Company
  Limited and Leeson (1982)
• LAC Minerals Ltd. V. International Corona
  Resources Ltd. (1989)

11
Pre-Cam Exploration Development v. McTavish

• McTavish was employed by Pre-Cam on inspection of
  mining claims for a client, Murtack
• He noted the mineralization extended beyond the
  existing claims
• He quit his job and staked his own claims on
  these adjacent properties
• Neither Pre-Cam nor McTavish, its servant, could
  acquire these connected claims against the
  interest of Murtack
• Finding of a constructive trust

12
Canadian Aero Services Ltd. v. OMalley

• Former directors, senior officers and solicitor
  used confidential information improperly taken
  the fruits of a corporate opportunity in which
  Canaero had a prior and continuing interest
• Duty continues after termination of employment
• Fiduciary duty upon director or senior officer
  one of loyalty, good faith, avoidance of conflict
  of duty and self-interest

13
Guyer Oil v. Fulton

• Fulton was a petroleum engineering consultant for
  Guyer Oil while supervising drilling of six wells
  in the Dodsland field
• Shortly after, he acquired Crown mineral leases
  in close proximity
• Contention that Fulton used information belonging
  to Guyer to evaluate and acquire Crown leases
• No finding of improper use of confidential
  information (reliance on public info)
• Fulton, in preparing the recommendation and
  submitting the bid for the Crown lease, relied
  upon the general knowledge and skill which he had
  acquired over a great deal of time in the
  practice of his profession

14
Chevron Standard Limited v. Home Oil Company
Limited and Leeson

• Leeson employed as geologist by Chevron for 23
  years, and then hired by Home
• Chevron discovered two anomalies and drilling
  before Leeson left
• Home acquired mineral rights in the area of the
  anomalies, resulting in successful wells
• Chevron claimed Leeson misused confidential
  information of Chevron
• Judge found that Leesons knowledge was limited
  and that he did not misuse or disclose
  confidential information
• Employee entitled to use information gained in
  former employment as long as confidential
  information not divulged

15
LAC Minerals Ltd. v. International Corona
Resources Ltd.

• Corona explored properties with good potential
  for gold mining
• Chief geologist thought it appropriate to acquire
  adjacent property
• LAC suggested a joint venture with Corona, but no
  JV concluded
• LAC acquired adjacent property itself and
  developed gold mine
• Corona sued for breach of fiduciary duty and
  breach of confidence
• Remedy was a constructive trust