Case Report – Man QB stresses spoliation claims will be dealt with at trial

23 Dec

On December 1st, the Manitoba Court of Queen’s Bench dismissed a motion for an order striking out a statement of defence on the basis of a spoliation claim.  It stressed that spoliation claims will ordinarily be dealt with at trial.

The claim was for defamation and abuse of public authority and centered on an investor alert published by the Manitoba Securities Commission.  The warning was published after the conclusion of an MSC investigation in which it had met with the plaintiffs and surreptitiously recorded the meeting.  The MSC destroyed the audiotape after litigation had commenced on the advice of the RCMP, who said that destruction was required by section 184.1 of the Criminal Code, a wiretap authorization provision that puts certain restrictions on the retention of wiretap evidence. The plaintiffs claimed that this provision did not apply and that the MSC was reckless in following the RCMP’s advice. They claimed the transcript of the interviews that remained was inaccurate, refused to answer questions about the authenticity of the transcript and moved for an order to strike.

In dismissing the motion, the Court adopted the Alberta Court of Appeal’s recent six-part conclusion in McDougall v. Black & Decker Canada Inc.  In fact, it treated the conclusion like a code, taking pains to modify the sixth part of the Alberta Court of Appeal conclusion to ensure slightly greater leeway to award pre-trial relief for spoliation.  It replaced the following Alberta rule…

Pre-trial relief may be available in the exceptional case where a party is particularly disadvantaged by the destruction of evidence.  But generally this is accomplished through the applicable rules of court, or the court’s general discretion with respect to costs and the control of abuse of process.

…with this rule, which it said should apply in Manitoba:

Pre-trial relief may be available where a party claims on reasonable grounds that he may be disadvantaged by the destruction of evidence.  But generally this is accomplished through the applicable rules of court, or the court’s general discretion with respect to costs and the control of abuse of process.

The Court held that the plaintiffs had not proven any prejudice on the motion, but it stated that a “qualitative assessment” of the MCP’s actions and the impact on the plaintiffs’ case could be heard by the trial judge.  And despite its preference for slightly more flexibility than in Alberta, the Court nonetheless stressed that pre-trial relief for spoliation claims should be rare: “Our legal system is structured to require issues of admissibility of evidence to be determined at trial and not by a pre-trial judge.”  

In the end the Court did issue an order barring the defendants from using the transcript in discoveries.  Though the plaintiffs had not yet proven prejudice, it held this restriction was fair given the MCP’s continued reliance on the Criminal Code provision, which on the MCP’s reading, ought to also have required it to destroy the transcript.

Commonwealth Marketing Group Ltd. v. Manitoba Securities Commission, 2008 MBQB 319 (CanLII).

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