There were two morning sessions today at the trial of the Quebec class actions against tobacco companies. The first morning session took place in the regular court room at Montreal's Palais de Justice, and the second took place three hours later in Victoria, British Columbia.
Morning in Victoria: Peter Gage reminisces about Macdonald Tobacco
Other witnesses have been expected to travel to Montreal, but in view of the age of this witness (92) it was decided that the proceedings could come to him. The Victoria location was not the only adjustment that was made in light of Mr. Peter Gage's advancing years. His testimony today was as a witness for JTI-Macdonald, even though it will be months before the defendant companies call witnesses in the normal schedule. It is a long trial indeed, when the lifespan of witnesses is weighed against the schedule.
This is the first time that this trial has used teleconferencing to patch in a witness from another city. Let's just say that the technology worked as well as can be expected, but not as well as one would hope. Lawyers, clerks, videographers and family members squeezed into a bare-bones Victoria meeting room that could have been plucked from the set of "The Office." Meanwhile in Montreal, the proceedings were watched on the monitors that are mounted throughout the room.
A legal hearing is a verbal dance that is hard to coordinate across two rooms and 3,000 miles, and everyone adjusted to the changed pattern. Justice Riordan's direction of the proceedings was done with a deliberately light hand, and the number of interruptions and interjections was reduced (although Bruce Johnston did not pass up the opportunity to parrot the objections to evidence that the plaintiffs routinely face).
Doug Mitchell, who has represented JTI-Macdonald for many years, sounded more like a NPR or CBC radio host than tough litigator today, as he invited Peter Gage to reminisce about Macdonald tobacco. And in radio terms Peter Gage was a great interview - a colourful raconteur of social, industrial and family history.
Peter Gage told the story of arriving from a modern tobacco plant in England in 1956 to take up a position as assistant to David Stewart, son of the iconic owner-operator of Macdonald tobacco, Walter Stewart. What he found on his arrival was a manufacturing plant that was 50 years out of date, and a management culture that would have given Freud a field day.
"Walter Stewart was a complete autocrat. He insisted on deciding everything. He didn't like anyone interfering with his decisions - he was semi-benevolent despot."
Mr. Gage's suggestions for improvements to the factory almost got him fired . "He [Walter Stewart] didn’t talk to me for two years." The silent treatment was extended much longer to the son, David. The witness laughed as he recounted Sunday breakfast at the Stewart family home, to which he was often invited. The father could not even bring himself to ask the son to pass the marmalade jar.
Intermediaries were the norm at the plant, where employees conspired behind the scenes to work around Walter Stewart's bizarre behaviour. Because no one but Walter Stewart could have a telephone, for example, an 'out of order' sign was placed on the factory's public phone to leave the lines open for business calls. Christmas bonuses were given in cash, and accompanied by a note in Mrs. Walter Stewart's hand to "on no account acknowledge this."
Canada's second largest tobacco company ran with almost no management staff.
"What was unique is that there were no positions in the factory – it was a company without any sales people, everything was sold through agencies. We had no marketing department and no Research and Development department. Our head office consisted of Mr. and Mrs. Stewart - basically there was no overhead at all."
The plant made 35 million cigarettes a day - but not enough to keep up with demand. Mr. Gage's description of the production quota had the courtroom in stitches:
"Mr. Stewart and his wife opened the mail in the morning which comprised of orders for cigarettes. They had an adding machine and when the total came to the amount of cigarettes you could produce in the factory he didn’t open any more mail."
Even with virtually no advertising, the company did very well, holding about 40% of the Canadian market until the market expansion of the 50s and 60s. The trust fund into which all of the profits of the company were paid supported local charities, especially hospitals and universities.
This Willy Wonka scenario came to an end in 1968, when Walter Stewart died and David Stewart took over (his mother remained President).
This change in ownership came amid the great upheaval in the tobacco business after the health harms from smoking were established. Yet Macdonald had no strategy to deal with this, said Peter Gage.
"The feeling was if you could put a man in the moon they ought to be able to come up with an antidote for the health problem of cigarettes. A lot of people were of the same view. But as you know it didn’t happen. ...We knew there was a problem. We had no research facilities. There was nothing we could do about it.... We had no any major discussions with the industry or even withourselves because we didn’t have the facilities – we didn’t even have a chemist on the side. We were spectators to the scene in some ways."
David Stewart took charge of the company as the pressure for health reform was building. The government for the first time published the tar values of Canadian cigarettes. The publication of these numbers (not favourable to Macdonald brands) took David Stewart by surprise. "He thought it was the Pearl Harbour of the tobacco industry."
Peter Gage took a message of concern about "the numbers racket" to John Munro, and in a later meeting with David Stewart the tobacco manufacturer told the Health Minister that he "wanted Macdonalds to be dealt with differently because of its major donations to charity."
Mr. Gage said that David Stewart was not a good business man, but rather had a love for history. Without any great business talent, he began to reform the company - modernizing production, launching into advertising and introducing more contemporary brands (like Contessa for "ladies"). He toyed with diversifying into other businesses, and dreamed of buying a castle in Scotland.
For a while he wanted to provide $10 million to fund research to prevent cancer from smoking, and met with doctors to discuss this. "The doctors were frank with their speeches. They told David the only sure way was to stop people smoking. Although research was going on they personally didn’t feel optimistic about the results. It [the meeting] had a big influence on David Stewart - that was when he first thought of selling the business."
In 1974, David Stewart sold Macdonald Tobacco to the RJ Reynolds company. Two years earlier, Peter Gage had moved to Imperial Tobacco, where he worked in operations until 1982. For many years he negotiated the purchase of tobacco from Ontario farmers, and participated in official Canadian trade delegations to promote tobacco sales overseas. He has been retired or semi-retired for 30 years.
Montreal morning: Silvana Conte does not grovel
Imperial Tobacco lawyer Silvana Conte has not been seen in the courtroom since May 17 when she demanded (not asked) for an in camera session to present her reasons for requesting a sealing order on some Imperial Tobacco documents. She was spectacularly unsuccessful in the end - Justice Riordan mocked her request in his ruling ("Franchement" he wrote) and the Court of Appeal turned a deaf ear to her request for his decision to be reviewed.
Undeterred by her record, and little changed in her demeanor, she returned today with the goal of protecting another Imperial Tobacco document from disclosure.
The document in question, by inference, involves ITL scientist Dr. Massey and is related to an industry position on smoking and health. A long-ago case-management ruling by Justice Blanchard determined that the draft of this document would remain privileged, but the final version of the document would be made public. The company was given until a year ago to provide the final version -- the penalty for being late was that the draft version would lose privilege.
For over an hour - and with a thick book of legal authorities - Silvana Conte argued that the company should not have to face the consequences for failing to produce the final version - Where We Stand - for several months. Justice Riordan, she said, has the authority to let the company off the hook, by virtue of Article 9 of the Code of Civil procedure, and the responsibility to do so.
She had a most peculiar way of asking for a favour. Only slightly less high-handed in tone than in May, she made it sound like her company was the injured party. She surrounded her request with references to the "quasi-constitutional" rights of solicitor-client privilege, the Quebec Charter of Rights and Freedoms, and the obligation of the courts to err on the side of caution. There was nothing in her tone that said "please," or that acknowledged that their legal team was in a pickle of their own making, as they had clearly faulted on a deadline.
Most curiously, she failed to respond to Justice Riordan's questions and hints about wanting to know why the delay had occurred, or what circumstances might help justify his support of her request.
Philippe Trudel took little time in offering the plaintiff's perspectives - that the document should be made public by virtue of the Blanchard ruling and the company's failure to meet the conditions of it. He provided e-mail exchanges that Ms. Conte had neglected to include in her binderized materials - ones which showed a shift in ITL's strategy to keep the document private after the deadline had passed. Without producing the original document, Mr. Trudel suggested that it was so different enough from the document claimed to be a final version that some demonstration was required of the relationship between the two versions.
After a short break, Justice Riordan said he would rule on the matter when Mr. Massey testified later in the trial.
Housekeeping issues
With some time to spare, the focus shifted to the nit-piky task of entering non-controversial documents into evidence. JTI's document doyenne, Catherine McKenzie, provided versions of all Canadian laws and voluntary industry codes, which are now on the trial record (Exhibits 40002, 40003, 40004 and 40005 series).
Tomorrow's session will similarly have a Montreal morning session focused on documents and a Victoria morning session during which Bruce Johnston will begin his cross examination of Peter Gage.
Morning in Victoria: Peter Gage reminisces about Macdonald Tobacco
Other witnesses have been expected to travel to Montreal, but in view of the age of this witness (92) it was decided that the proceedings could come to him. The Victoria location was not the only adjustment that was made in light of Mr. Peter Gage's advancing years. His testimony today was as a witness for JTI-Macdonald, even though it will be months before the defendant companies call witnesses in the normal schedule. It is a long trial indeed, when the lifespan of witnesses is weighed against the schedule.
This is the first time that this trial has used teleconferencing to patch in a witness from another city. Let's just say that the technology worked as well as can be expected, but not as well as one would hope. Lawyers, clerks, videographers and family members squeezed into a bare-bones Victoria meeting room that could have been plucked from the set of "The Office." Meanwhile in Montreal, the proceedings were watched on the monitors that are mounted throughout the room.
A legal hearing is a verbal dance that is hard to coordinate across two rooms and 3,000 miles, and everyone adjusted to the changed pattern. Justice Riordan's direction of the proceedings was done with a deliberately light hand, and the number of interruptions and interjections was reduced (although Bruce Johnston did not pass up the opportunity to parrot the objections to evidence that the plaintiffs routinely face).
Doug Mitchell, who has represented JTI-Macdonald for many years, sounded more like a NPR or CBC radio host than tough litigator today, as he invited Peter Gage to reminisce about Macdonald tobacco. And in radio terms Peter Gage was a great interview - a colourful raconteur of social, industrial and family history.
Peter Gage told the story of arriving from a modern tobacco plant in England in 1956 to take up a position as assistant to David Stewart, son of the iconic owner-operator of Macdonald tobacco, Walter Stewart. What he found on his arrival was a manufacturing plant that was 50 years out of date, and a management culture that would have given Freud a field day.
"Walter Stewart was a complete autocrat. He insisted on deciding everything. He didn't like anyone interfering with his decisions - he was semi-benevolent despot."
Mr. Gage's suggestions for improvements to the factory almost got him fired . "He [Walter Stewart] didn’t talk to me for two years." The silent treatment was extended much longer to the son, David. The witness laughed as he recounted Sunday breakfast at the Stewart family home, to which he was often invited. The father could not even bring himself to ask the son to pass the marmalade jar.
Intermediaries were the norm at the plant, where employees conspired behind the scenes to work around Walter Stewart's bizarre behaviour. Because no one but Walter Stewart could have a telephone, for example, an 'out of order' sign was placed on the factory's public phone to leave the lines open for business calls. Christmas bonuses were given in cash, and accompanied by a note in Mrs. Walter Stewart's hand to "on no account acknowledge this."
Canada's second largest tobacco company ran with almost no management staff.
"What was unique is that there were no positions in the factory – it was a company without any sales people, everything was sold through agencies. We had no marketing department and no Research and Development department. Our head office consisted of Mr. and Mrs. Stewart - basically there was no overhead at all."
"Mr. Stewart and his wife opened the mail in the morning which comprised of orders for cigarettes. They had an adding machine and when the total came to the amount of cigarettes you could produce in the factory he didn’t open any more mail."
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| 1945 promotion for Export cigarettes |
This Willy Wonka scenario came to an end in 1968, when Walter Stewart died and David Stewart took over (his mother remained President).
This change in ownership came amid the great upheaval in the tobacco business after the health harms from smoking were established. Yet Macdonald had no strategy to deal with this, said Peter Gage.
"The feeling was if you could put a man in the moon they ought to be able to come up with an antidote for the health problem of cigarettes. A lot of people were of the same view. But as you know it didn’t happen. ...We knew there was a problem. We had no research facilities. There was nothing we could do about it.... We had no any major discussions with the industry or even withourselves because we didn’t have the facilities – we didn’t even have a chemist on the side. We were spectators to the scene in some ways."
 |
| The publication of tar numbers in 1969 was a "Pearl Harbour" moment for David Stewart |
Peter Gage took a message of concern about "the numbers racket" to John Munro, and in a later meeting with David Stewart the tobacco manufacturer told the Health Minister that he "wanted Macdonalds to be dealt with differently because of its major donations to charity."
Mr. Gage said that David Stewart was not a good business man, but rather had a love for history. Without any great business talent, he began to reform the company - modernizing production, launching into advertising and introducing more contemporary brands (like Contessa for "ladies"). He toyed with diversifying into other businesses, and dreamed of buying a castle in Scotland.
In 1974, David Stewart sold Macdonald Tobacco to the RJ Reynolds company. Two years earlier, Peter Gage had moved to Imperial Tobacco, where he worked in operations until 1982. For many years he negotiated the purchase of tobacco from Ontario farmers, and participated in official Canadian trade delegations to promote tobacco sales overseas. He has been retired or semi-retired for 30 years.
Montreal morning: Silvana Conte does not grovel
Imperial Tobacco lawyer Silvana Conte has not been seen in the courtroom since May 17 when she demanded (not asked) for an in camera session to present her reasons for requesting a sealing order on some Imperial Tobacco documents. She was spectacularly unsuccessful in the end - Justice Riordan mocked her request in his ruling ("Franchement" he wrote) and the Court of Appeal turned a deaf ear to her request for his decision to be reviewed.
Undeterred by her record, and little changed in her demeanor, she returned today with the goal of protecting another Imperial Tobacco document from disclosure.
The document in question, by inference, involves ITL scientist Dr. Massey and is related to an industry position on smoking and health. A long-ago case-management ruling by Justice Blanchard determined that the draft of this document would remain privileged, but the final version of the document would be made public. The company was given until a year ago to provide the final version -- the penalty for being late was that the draft version would lose privilege.
For over an hour - and with a thick book of legal authorities - Silvana Conte argued that the company should not have to face the consequences for failing to produce the final version - Where We Stand - for several months. Justice Riordan, she said, has the authority to let the company off the hook, by virtue of Article 9 of the Code of Civil procedure, and the responsibility to do so.
She had a most peculiar way of asking for a favour. Only slightly less high-handed in tone than in May, she made it sound like her company was the injured party. She surrounded her request with references to the "quasi-constitutional" rights of solicitor-client privilege, the Quebec Charter of Rights and Freedoms, and the obligation of the courts to err on the side of caution. There was nothing in her tone that said "please," or that acknowledged that their legal team was in a pickle of their own making, as they had clearly faulted on a deadline.
Most curiously, she failed to respond to Justice Riordan's questions and hints about wanting to know why the delay had occurred, or what circumstances might help justify his support of her request.
Philippe Trudel took little time in offering the plaintiff's perspectives - that the document should be made public by virtue of the Blanchard ruling and the company's failure to meet the conditions of it. He provided e-mail exchanges that Ms. Conte had neglected to include in her binderized materials - ones which showed a shift in ITL's strategy to keep the document private after the deadline had passed. Without producing the original document, Mr. Trudel suggested that it was so different enough from the document claimed to be a final version that some demonstration was required of the relationship between the two versions.
After a short break, Justice Riordan said he would rule on the matter when Mr. Massey testified later in the trial.
Housekeeping issues
With some time to spare, the focus shifted to the nit-piky task of entering non-controversial documents into evidence. JTI's document doyenne, Catherine McKenzie, provided versions of all Canadian laws and voluntary industry codes, which are now on the trial record (Exhibits 40002, 40003, 40004 and 40005 series).
Tomorrow's session will similarly have a Montreal morning session focused on documents and a Victoria morning session during which Bruce Johnston will begin his cross examination of Peter Gage.
