Case Report – Divisional Court writes a chapter on Anton Piller orders

On July 14th, the Ontario Superior Court of Justice – Divisional Court made some significant comments in affirming an order to set aside an Anton Piller order.

The order was initially granted in 2006 in support of a departing employee claim that included allegations of fraud and breach of confidence. Hambly J. set it aside based on a failure to demonstrate a threat of very serious damage and failure to to make full, frank and fair disclosure. He later imposed a costs award on the plaintiff in respect of the Anton Piller proceedings that totaled over $550,000. This motivated the plaintiff’s appeal, which was made on leave and over an objection that the matter was moot.

The Divisional Court, in reasons written by Wilton-Siegel J., dismissed the appeal. Its key legal findings are as follows:

  • The second factor outlined in Celanese requires a plaintiff to demonstrate a strong prima facie case for “very serious damage.” This is not necessarily satisfied by proof of a substantial risk of an inability to prosecute due to the destruction of evidence. Wilton-Siegel J. suggests that a court should also examine whether very serious damage will flow from the misconduct itself.
  • Since an Anton Piller order is discretionary, a plaintiff is not entitled to an order if it meets the four criteria outlined in Celanese. A court should consider whether an order is necessary, including “whether the evidence is available to the plaintiff by other means that are not as intrusive as an Anton Piller order.”
  • Evidence of belief or suspicion of wrongdoing and damage must be based on a solid foundation of “documentary or other evidence.” If a plaintiff  adduces evidence of belief or suspicion without “very strong reasons to believe,” it must disclose its weakness.

The Court’s reasons flesh out the requirements for an Anton Piller order and invite a conservative application of discretion in a manner that should give plaintiffs considering this remedy reason to pause for additional thought. The reasons make very clear that surviving a motion to set aside is no small feat. Moreover, the Court’s treatment of the second – “very serious damage” – factor in Celanese addresses what Wilton-Siegel J. characterizes as an ambiguity in the case law.

Factor Gas v. Jean, 2010 ONSC 2454 (CanLII).

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