Case Report – Court says lawyer’s seized hard drives ought to be stored by a neutral

On April 20th, the Ontario Superior Court of Justice ordered a number of computers and hard drives that had been seized from a lawyer as part of a child pornography investigation to be stored by a neutral examiner.

The devices were seized, immediately sealed and stored by the local police. Presumably, they all contained solicitor-client communications belonging to the lawyers’ clients. The Attorney General and the Law Society agreed to a protocol that involved retaining a neutral examiner to image hard drives and use a non-manual review process to look for and extract any images of child pornography. They did not, however, agree on where the drives and images would be stored.

The Law Society argued that the risk of an inadvertent security breach at the police station required that the devices be stored either at the Court or by the neutral expert. It argued that public confidence in the administration of justice would be compromised if privilege holders learned that communications related to their criminal defence were in the care and the control of the police.

Though she held that the risk of a breach of privilege was minimal, Justice Hennessy nonetheless ordered the devices to be stored by the neutral. She said:

This Court has a duty to ensure that all safeguards are put in place to avoid completely or reduce as completely as possible, any risk of a breach of solicitor-client privilege. This duty is particularly onerous in this situation, where any breach of the privilege would put the privileged material in the hands of the police who are adverse in interest to the privilege holders. This is not the case of a generic protection fo privilege against any disclosure to an uninterested person. The consequences of a breach of the solicitor-client privilege in this case go to fundamental principles. At this early stage of the proceedings, the Law Society does not have to show that there is a probability f a breach of the privilege if the seized devices are stored with the Timmins Police. We are in a preventative situation now. Fortunately, we are not dealing reactively to an allegation of an inadvertent breach.

According to Justice Hennessy, the Attorney General, though objecting the Law Society’s position, did not identify any specific concerns with storage at the neutral’s facility. She also noted that her order was based on special circumstances, a likely reference to the fact that the police investigation did not require an examination of any solicitor-client communications.

Attorney General v. Law Society, 2010 ONSC 2150.

Case Report – Employer liable to former employee in defamation

This is a quick summary of a July 20th British Columbia Court of Appeal defamation decision with illustrative value. The Court held an employer to be liable for nominal damages in defamation because a manager ticked an “inadequate performance” box on a human resources exit form without justification. The Court accepted that the act of completing and sending the form was subject to qualified privilege, but held that the employer exceeded its privilege because the manager e-mailed the form to a person who did not have a proven duty to receive it (as a member of human resources). It awarded the plaintiff $1,000.

Dawydiuk v. Insurance Corporation of British Columbia,2010 BCCA 353.

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).

Case Report – Alberta Court says statutory privilege does not preclude an action

On July 14th, the Alberta Court of Appeal held that the privilege embodied in section 241 of the Income Tax Act was not a basis for striking a claim against the federal government based on the manner in which it administers the ITA.

The Court held that it was not clear section 241 would preclude the plaintiff from obtaining evidence from the government. More broadly, it held that a party’s ability to obtain evidence is not a proper consideration on a motion to strike:

In any event, the section does not preclude the plaintiff from deriving the evidence it needs from sources other than the defendant Canada. It is reasonably common for a defendant to be in the possession of relevant and material information which need not be disclosed because it is privileged, but that does not prevent the lawsuit from proceeding. The plaintiff can try to prove its case without that evidence. Further, whether a pleading discloses a cause of action is a distinct issue from whether the plaintiff will be successful in marshalling the evidence needed to prove that cause of action. Section 241 is not determinative of this appeal.

The Court ultimately did strike the claim as disclosing no reasonable cause of action based on a finding that the government did not owe the plaintiff a private law duty of care.

783783 Alberta Ltd. v. Canada (Attorney General), 2010 ABCA 226 (CanLII).

Case Report – Federal Court deals with what’s accessible as “relating to” a public service position or function

On June 9th, the Federal Court held that the employment history of federal public servants prior to their entry into the pubic service is not accessible as information that “relates to the position or functions of the individual.”

Section 19 of the Access to Information Act is a mandatory exemption for records containing “personal information” as defined in section 3 of the Privacy Act. Section 3 of the Privacy Act defines personal information as “information about an identifiable individual,” including information related to an individual’s “employment history.” This definition is then subject to a provision that deems certain kinds of information to be excluded from the definition of personal information, including:

3(j) information about an individual who is or was an officer or employee of a government institution that relates to the position or functions of the individual including,

(i) the fact that the individual is or was an officer or employee of the government institution,

(ii) the title, business address and telephone number of the individual,

(iii) the classification, salary range and responsibilities of the position held by the individual,

(iv) the name of the individual on a document prepared by the individual in the course of employment, and

(v) the personal opinions or views of the individual given in the course of employment

The applicant relied on this deeming provision in seeking access to information about job competition candidates’ employment history prior to their entry into the pubic service. He argued that this information, though not about a position or function in the public service, nonetheless “relates to” a position or function because each candidate’s employment history prior to entry into the public services was essential to obtaining a public service position.

The Court rejected this argument, stating:

…the Court cannot conclude that the information to which this application pertains is information relating to the position or functions of the candidates hired under these four competitions. This information concerns their education, experience and skills prior to obtaining a position in a government institution. It also primarily concerns the persons themselves, even if these skills and personal suitability were assessed to ensure that these candidates had the skills otherwise required for these positions in the federal administration. As mentioned, the information regarding the general characteristics directly associated with these positions, including the qualifications required to obtain them, – as opposed to information on the candidates themselves – was disclosed to the applicant. (Emphasis in original.)

The Court noted that its finding was on an issue of first impression.

Nault v. Canada (Public Works and Government Services), 2010 FC 623.

Case Report – Another Ontario arbitrator holds that relevant evidence is admissible, period

On June 18th, Arbitrator Joseph Rose dismissed a preliminary objection that sought the exclusion of video surveillance evidence based on an allegation of insufficient grounds to warrant its use. He adopted the views expressed by Arbitrator Bendel and Arbitrator Raymomd and held (in perhaps slightly more qualified terms than the aforementioned) that relevant evidence is admissible despite any alleged privacy breach.

Thames Emergency Medical Services v. CAW, Local 302 (Wilson Grievance), [2010] O.L.A.A. No. 315 (Rose).

Case Report – OLRB holds that faculty union has right to harassment investigation decisions

The Ontario Labour Relations Board issued a decision on June 6th in which it held that a faculty union, as a certified bargaining agent, has a right of routine access to harassment investigation decisions in which either the complainant or respondent is a member. Vice-Chair Patrick Kenny held that the provision of this information was necessary to the union’s representational role:

Without providing an exhaustive list of the circumstances in which the trade union bargaining agent will reasonably require confidential information, the facts in this case give one circumstance in which the trade union is entitled to receive the information. It has a responsibility, with the University, to provide a harassment-free and to ensure a discrimination-free working environment. It is involved in responding to employees in its bargaining unit who have been subjected to harassment or discrimination such as would be described in the Notices of Decision. This is why it has a legal interest in receiving, and is entitled to, copies of the Notices of Decision.

I am persuaded, therefore, that LUFA’s request for copies of each Notice of Decision, is clearly grounded in section 70 of the Act. LUFA needs that information, which is disclosed as of right to the complainant, the respondent and the individual responsible for taking corrective action, for the purpose of deciding whether or not it ought to file grievances to protect the interests of individual bargaining unit members, the bargaining unit as a whole, and/or the trade union as an institutional party. Indeed, LUFA has filed grievances in the past with respect to issues arising from the results of investigations and conclusions reached in Notices of Decision under the Policy. Apart from any application of the Privacy Act, LUFA is entitled under section 70 to a copy of each Notice of Decision.

Vice-Chair Kenny held that individual consent was not necessary, that that records of harassment investigations involving faculty are excluded from the Freedom of Information and Protection of Privacy Act as employment-related and that, in any event, their disclosure to the union would be authorized as “required by law.”

Laurentian University Faculty Association v. Laurentian University, 2010 CanLII 32256 (ON L.R.B.).

Case Report – Master Short deals with deficient production allegations

On June 22nd, Master Short of the Ontario Superior Court of Justice addressed motions by two parties alleging each other provided deficient electronic production.

Motion A – Form of producing electronic documents deficient

Apotex sought a further and better affidavit of documents from Ercos, who initially produced approximately 1700 PDF files on a DVD. The PDF’s were named in a coded form, but the codes did not correspond with the codes Ercos had provided in its Schedule A index. Instead, it provided a table of concordance to allow the two different codes to be matched. One day after Aptoex served its notice of motion for a further and better affidavit of documents, Ercos produced a CT Summation load file to Apotex, but argued this was done as courtesy and that its original production was proper. Master short disagreed, stating:

While I am not being critical of counsel in this specific case, I do however take this opportunity to express my view in general that in cases of this nature the new rules put an onus on counsel, in situations such as this, to not use electronic production to gain tactical advantage. The requirement, in part arising from the “equality of arms” component of proportionality, does not mean that a party need provide a computer system to their opponents, but they do need to work together to facilitate the exchange of information and a practical production and exchange of the “bibliographic data” attached to their productions.

Master Short did not make an order in the circumstances.

Motion B – Paltry production justifies further and better affidavit

Ercos sought leave to cross-examine Apotex’s affiant and a further and better affidavit of documents from Apotex, who was claiming $100 million in damages as a result of delayed marked entry related to supply problems. Despite the nature of its claim, Apotex delivered a sworn and certified Affidavit of Documents that listed only 56 documents in Schedule A, all of which related to issues of liability and none that related to damages claimed. When pressed, it eventually produced an additional 14 documents related to damages claimed.

In ordering Apotex to provide a further and better affidavit of documents, Master Short did not expressly infer deficiency from the number of documents Aptoex had produced, but he did note the “totality of the circumstances” and the “entirety of the matters discussed.” He also found Aptoex’s own evidence and position flawed. Apotex adduced evidence on the motion that “counsel requested that Apotex forward all documents related to the issues of liability” and argued that a motion for production of documents related to damages claimed was premature in advance of oral discovery. Master Short said:

I regard this position as approaching a total disregard for the expectation of Rules. A party cannot unilaterally bifurcate its case, fail to disclose documents relating to remedy, and then, assert that the disclosure of the existence and content of any additional documents can wait until discovery.

Perhaps more significant to those engaged in e-discovery, Master Short suggested (subtly) that the “field filtering” document collection process followed by Apotex was not sufficient. He said counsel should have been “more proactive” and that he was not satisfied documents were “effectively requested from the client.”

Master Short did not order cross-examination on the deficient affidavit on the assumption that full production would be provided “in accordance with the directions and spirit of [his] reasons.”

Apotex Inc. v Richter Gedeon Vegyszeti Gyar RT, [2010] O.J. No. 2718 (S.C.J.).

Case Report – Court says PIPEDA doesn’t apply through commercial agents

The Federal Court issued a very significant judgement on the scope of PIPEDA application today. Mainville J. held that PIPEDA does not apply to a collection, use or disclosure of personal information merely because it is collected, used or disclosed by an agent on behalf of a principal with whom it is in a commercial relationship.

PIPEDA applies to personal information that is “collected, used or disclosed in the course of commercial activity.” Since PIPEDA came into force in the provinces, people have questioned whether it applies merely because personal information is processed by an agent that is in a commercial relationship with a principal that is engaged in provincially-regulated activity. For example, provincially-regulated employers retain a range of agents who collect, use and disclose employee personal information on their behalves for the purpose of employment administration – e.g. private investigators, payroll processing agents, benefit administrators and others.

In the matter addressed in today’s decision, State Farm retained a private investigator on behalf of an insured person who was ultimately sued by a motor vehicle accident plaintiff. The private investigator conducted video surveillance on the plaintiff, and the plaintiff sought access to the surveillance footage under PIPEDA. Mainville J. held that PIPEDA did not apply. He said:

I conclude that, on a proper construction of PIPEDA, if the primary activity or conduct at hand, in this case the collection of evidence on a plaintiff by an individual defendant in order to mount a defence to a civil tort action, is not a commercial activity contemplated by PIPEDA, then that activity or conduct remains exempt from PIPEDA even if third parties are retained by an individual to carry out that activity or conduct on his or her behalf. The primary characterization of the activity or conduct under PIPEDA is thus the dominant factor in assessing the commercial character of that activity or conduct under PIPEDA, not the incidental relationship between the one who seeks to carry out the activity or conduct and third parties. In this case, the insurer-insured and attorney-client relationships are simply incidental to the primary non-commercial activity or conduct at issue, namely the collection of evidence by the defendant Ms. Vetter in order to defend herself in the civil tort action brought against her by Mr. Gaudet.

This is a broad and principled finding on the scope of PIPEDA application. It is not limited to any particular kind of agency relationship and will no doubt cause lawyers, insurers and provincially-regulated employers to be pleased.

Note that State Farm backed its successful interpretation ground with a ground that rested on a very broad challenge to PIPEDA’s constitutional validity. Mainville J. did not decide on this second ground. His decision also contains some findings on points of judicial review procedure and administrative law that I have not summarized.

[Hat tip to David Fraser, and a big congrats!]

State Farm v. Privacy Commissioner of Canada, [2010] FC 736.

Case Report – Court espouses preference for conservative approach to PIPEDA remedies

On June 23rd, Mosely J. of the Federal Court dismissed a PIPEDA application because the applicant failed to establish a need for a compliance order (with or without notice to the public) and failed to prove his damages. In doing so, Mosely J. made the following conservative statement about the PIPEDA’s remedial provision:

Pursuant to section 16 of PIPEDA, an award of damages is not be made lightly. Such an award should only be made in the most egregious situations. I do not find the instant case to be an egregious situation.

The OPC issued a report in May 2009 in which it concluded that the respondent – a fitness club – breached the consent rule in PIPEDA by disclosing information about the applicant’s membership usage to his employer as part a corporate membership program. It recommended a change in practice, and the respondent complied.

Mosely J. held that the applicant had established a breach of the consent rule but had not established justification for a remedy. He rejected the applicant’s argument that he suffered employment-related consequences because of the breach for wont of evidence. His reasoning suggests that individuals who apply for a PIPEDA remedy must prove damages, and based on the statement quoted above, something significantly more.

Randall v. Nubodys Fitness Centres, 2010 FC 681 (CanLII).