Case Report – Div. Ct. says documents protected by settlement privilege exempt from public access

11 Aug

On June 12th, the Divisional Court issued a decision in which it held that documents protected by settlement privilege are exempt from public access under the Ontario Freedom of Information and Protection of Privacy Act. This finding is of consequence itself, but the purpose-driven means by which the Divisional Court reached its secrecy-favouring finding are very significant.

The facts in the case are simple. The LCBO denied access to various records related to a mediated settlement of a number of civil proceedings between itself and a winery. The LCBO relied on the “solicitor-client privilege” exemption in section 19 of FIPPA. This exemption has two branches. Branch 1 exempts records that are subject to solicitor-client privilege and litigation privilege as these privileges are conceived at common law. Branch 2 exempts records that are “prepared by or for Crown counsel for use in giving legal advice or in contemplation or for use in litigation.”

The requester appealed to the Information and Privacy Commissioner/Ontario, who held that Branch 1 of section 19 does not exempt records that are subject to to settlement privilege from public access. The IPC also held that the LCBO did not prove that the records were exempt under Branch 2 of section 19 because, having not submitted affidavit evidence, the LCBO had not proved its stated intention to use the records in litigation should the mediation have failed.

The Divisional Court held that the records were exempt because they were subject to settlement privilege and because they fit within the Branch 2 exemption.

The first finding is very remarkable because the Court relied on FIPPA’s purpose provision rather than any one of the sixteen enumerated exemptions in FIPPA. In effect, the Court created an implied exemption from public access. It stated:

I conclude that the public policy interest in encouraging settlement as embodied in the common law concept of settlement privilege trumps the public policy interest in transparency of government action, in the circumstances of this case. I turn, then, to analyze this conclusion within the context of the indicators of legislative meaning proposed by professor Sullivan.

This interpretation is plausible because it complies with the legislated text (s. 1(a) of FIPPA) which provides for “necessary exemptions” that are “specific and limited.” The exemption is “necessary” to maintain confidentiality of negotiated settlements. The exemption is “specific” and “limited” in that i is specific to and limited by the circumstances of this case. A case-by-case analysis ensures settlement privilege will always be specific to and be limited by particular fact situations.

This interpretation is efficacious because it promotes the legislative purpose of creating exemptions where necessary, provided the exemptions are limited and specific.

This interpretation is acceptable because it leads to a conclusion that is both reasonable and just. As noted earlier in these reasons, no party would willingly entertain settlement discussions with a government institution if it knew its confidential settlement discussions would be made public. This is particularly so where admissions would be made and concessions offered that would be detrimental to that party. If required to discuss settlement by the Rules, those discussion would not, I suggest, be meaningful.

The Court also held that Branch 2 of section 19, interpreted purposely, ought to exempt materials otherwise subject to settlement privilege as a class. It said:

The LCBO asserted before the IPC that the mediation materials were intended for use in litigation should the mediation fail. The IPC refused to consider this because of a finding that there was no evidence to this effect. It is unnecessary for me to resolve this dispute, other than to say it is obvious that some materials used in any mediation will subsequently be used to prepare for trial and at the trial itself…

The wording of Branch 2 imposes no temporal limits on the protection provided nor limits it to particular types of litigation documents, nor specifies specific steps in the litigation. Nothing in the legislative text suggest that the term “litigation” should be given a different mening than that adopted by the courts and reflected in the Rules [of Civil Procedure]. Such an interpretation complies with the legislative text.

Such an interpretation of Branch 2 also promotes the purpose of FIPPA to provide transparency of government functioning “with exceptions where the interests of public knowledge are overbalanced by other concerns” (see Big Canoe (C.A.) above). To interpret Branch 2 in this manner recognizes that in the case of records prepared by or for Crown counsel for use in any aspect of litigation, the interests of the public in transparency are trumped by a more compelling public interest in encouraging the settlement of litigation.

The Court’s protective outlook is very atypical and will certainly be of great concern to the IPC and open government advocates. There’s also some dicta in the decision that reveals a significant subtext.

What flows from the IPC’s view of the law regarding settlement negotiations? First, the details of negotiations and settlement of any dispute between a government institution and a third party will be available to the world at large, following a request. Apparently, a Requester need but ask anonymously and the IPC will undertake the heavy lifting, as in this case. There is a delicious irony in this matter, whereby the IPC, in the name of transparency, labours for an anonymous Requester.

Ontario (Liquor Control Board) v. Magnotta Winery Corp., [2009] O.J. No. 2980 (Div. Ct.) (QL).

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