Author: Dan Michaluk

Information Roundup – 3 August 2008

Here’s an all e-discovery version of the Roundup for a change. You may want to check these out.

  • Craig Ball, “Keyword Searches: A Grimm Prognosis.” I’ve been reading Craig Ball’s comments on keyword search with great interest over the last while. He might seem slightly more conservative in his push to have lawyers train-up in search in this article given the three cases about searches gone bad which he covers. Includes good commentary on a much-discussed Maryland case called Victor Stanley. (Law.com)
  • Martin Felsky, “Principles of Litigation Management.” Martin argues that Canadian firms need to get on-top of e-discovery and its starts with good leadership. He suggests ten principles for litigation management. (Slaw.ca)
  • Denise Howell, “Cloud Computing and EULA Law.” I always enjoy listening to This Week in Law, but (despite the title) this one hit on a number of points relevant to our theme, including segments on the state of e-discovery, the Viacom v. YouTube production order and subsequently agreed-to stipulation and the production-related ramifications of “cloud computing.” (Twit.tv)
  • Peter Timmins, “UK Privacy Decision a pointer of things to come here.” Okay, not quite an e-discovery decision, though Mr. Justice Eady does consider that Mr. Mosley and “Woman A” had deleted e-mails and concludes (rather casually) that he could draw no improper inference in the context. Truth is, I spent quite a chunk of time scratching my head about something to say about the case and gave up. Now having read a good deal of the early commentary, I think I would have said something like what Peter Timmins has said here. (Open and Shut)

On a personal note, I did my last training paddle towards the lake crossing today, and I guess I’m ready because it was four hours and still felt pretty short. Max, P.J. and I are raising funds for “The Big Wild Fund,” which is being used to fund various initiatives by the Canadian Parks and Wilderness Society. If you are a regular reader of this blog please consider making a small donation. Information about our challenge and how to donate is available here. One warning: I don’t think you can make an anonymous donation; if you contribute your name and donation amount will appear on our challenge site. This is unfortunate in my view, but I encourage you to think about donating anyway, and encourage you to donate by cheque if you’re uncomfortable. One hundred percent of the money flows through to CPAWS, which CPAWS uses to fund its vision less than no more than 20% for administration and fund-raising.

I’d also like to thank Boardsports for loaning us a stand-up paddleboard. I worked at Boardsports back when I was a teenager when it was called Wind Promotions and dealt mainly in windsurf gear. Now its got all you’ll need when looking for equipment and clothing related to… well, boardsports. Thanks guys!

See ya!

Case Report – SCC says CRA may audit one taxpayer through another

On July 31st, a 4-3 majority of the Supreme Court of Canada held that the Canada Revenue Agency need not seek judicial authorization to examine information about one taxpayer’s compliance by auditing another.

The case involved an audit of a university’s charitable foundation. The CRA sought to examine the Foundation’s records to determine whether it was receiving valid charitable donations. There was no dispute that, at the same time, it intended to pursue individual donors who may have made donations it expected to be invalid.

The question, given the CRA’s dual purpose, was whether it could seek Foundation records that would identify individual donors under its section 231.1 audit power (which allows it to look at a taxpayer’s records without judicial authorization) or whether it needed to rely on its section 231.2 production power (which allows it to look at a person’s records which relate to one or more “unnamed persons,” but only with judicial authorization).

The majority, in a judgement written jointly by McLachlin C.J. and Lebel J., held that the CRA does not need judicial authorization in conducting audits that are aimed at both parties to a tax-related transaction: “The s. 231.2(2) [judicial authorization] requirement should not apply to situations in which the requested information is required in order to verify the compliance of the taxpayer being audited.” It held that section 321.2 still has a meaningful role in the enforcement scheme because the CRA may need to seek information outside of a formal audit.

Rothstein J. wrote the dissenting judgement, and argued that the majority’s interpretation leaves no meaningful role for section 231.2. He argued that Parliament intended the requirement for judicial authorization that is embedded section 231.2(2) to be engaged whenever the CRA seeks information about “unnamed persons” through an audit of a taxpayer, even if the taxpayer’s own compliance is at issue.

This was a very close one to call, which makes me question whether it reveals something about the extent to which each of our top court’s justices value privacy. Justice Rothstein, however, adamantly declares that he differs with the majority only on a point of statutory interpretation and because the production power in section 231.2 ought to be given a meaningful role in the enforcement scheme. It seems to me that the eBay case (see here and here), where the CRA utilized section 231.2 to demand production of the account and transaction records of eBay “PowerSellers,” leaves a role for this provision despite the majority’s finding; in that instance, eBay was simply a record holder rather than a party to the tax-related transaction.

Redeemer Foundation v. Canada (National Revenue), 2008 SCC 46.

One to Watch – Garbage case ready for hearing at SCC

The Toronto Star reports that the appeal of R. v. Patrick – about whether there is a reasonable expectation of privacy in garbage stored outside of a home – is ready to be head by the Supreme Court of Canada this fall. My summary of the Alberta Court of Appeal decision is here.  The United States Supreme Court heard the issue in 1988 and held, in California v. Greenwood, that there is no reasonable expectation in garbage because of its ready access to the world.

Case Report – OCA grants leave in case about whistle-blower who leaked privileged report to Crown

On July 7th, the Ontario Court of Appeal granted leave to appeal in noteworthy case about breach of privilege by the Crown.

The case involves an investigation report prepared at the request of external legal counsel after a critical injury for which Occupational Health and Safety Act charges were ultimately laid. An employee who was given a draft of the report on the undertaking he destroy it gave a copy to the Crown. This was after the company had asserted privilege to the Ministry inspector, who had agreed not to order the report’s production.

When the Crown disclosed the report to the company it immediately objected, and at trial moved for a declaration (that the report was privileged) and a stay. It succeeded in obtaining a declaration, a stay and an order for $38,000 in legal costs. On appeal, the stay and the costs order were overturned. In its judgement on leave, the Ontario Court of Appeal explained the difference between the J.P. and the appeal judge’s views as follows:

Essentially and in a nutshell, the justice of the peace and the appeal judge approached the issue of prejudice differently. The justice of the peace assumed prejudice when the Crown gained access to the accused’s privleged document and held that in the circumstances no remedy short of a stay would ovecome that prejudice. The appeal judge, on the other hand, was of the view that the stay should be set aside. In her view, the trial should proceed but without prejudce to the applicant’s right to move for a stay during or at the conclusion of that trial if predjduce is demonstrated.

In granting leave, the Court of Appeal commented that the civil law cases on inadvertent disclosure of privileged records are not “particularly on point” and that this was likely an issue that would arise in the context of corporate accused who face “disgruntled” employees.

Thanks to my colleague Meghan Ferguson for the hat tip on this case.

The Queen (Ontario Ministry of Labour) v. Bruce Power Inc. (7 July 2008, Ontario Court of Appeal).

Hicks Morley Information and Privacy Post – Summer edition published

My colleague Paul Broad and I have just published a new edition of the Hicks Morley Information and Privacy Post. We’ve included our regular selection of indexed case summaries (most from this blog) relating to confidentiality duties, privacy, freedom of information and the law of production and have also included a link to a newly-published paper on employee privacy entitled, “The Limits of the Application Game – Why Employee Privacy Matters.”

To download The Post please click here and for a direct link to a copy of the paper please click here.

Case Report – Balance favours disclosure of photographs on Facebook given number of plaintiff’s friends

In a judgement from last October, the Ontario Superior Court of Justice ordered a plaintiff in a motor vehicle suit to produce copies of her Facebook pages. The defendant successfully argued that the pages were likely to contain photographs relevant to the plaintiff’s damages claim, and was buttressed by the fact that the plaintiff had served photographs showing herself participating in various forms of activities pre-accident.

In balancing the interest in full disclosure against the plaintiff’s right to privacy, the Court stated:

Having considered these competing interests, I have concluded that any invasion of privacy is minimal and outweighted by the defendant’s need to have the photographs in order to assess the case. The plaintiff could not have a serious expectation of privacy given that 366 people have been granted access to the private site.

This is a very logical, traditional and compelling statement, and is very significant given the arguments now being made for a new theory of privacy that encompasses intermediate forms of disclosure – i.e. disclosures which can be made without losing a complete privacy interest in the information disclosed.

Murphy v. Perger, [2007] O.J. No. 5511 (S.C.J.) (QL).

Information Roundup – 19 July 2008

A lazy day today spent hiding from the heat with Hugo, with Seanna heading up to the Rogers Cup to see Nadal get swarmed by fans.  Tomorrow I’ll paddle five hours, the last long paddle before I cross Lake O (Niagara-on-the-Lake to Toronto) in a couple weeks with Max from Halifax and P.J. from L.A., both who I connected with through this blog. Turns out Max from Halifax is a friend of a friend, which is exactly why I like Halifax so much.

Here are some readings that you might find interesting.

Enjoy!

Case Report – SCC says Privacy Commissioner can’t decide privilege claims

The Supreme Court of Canada issued its decision in Blood Tribe earlier today. In a judgement written by Mr. Justice Binnie, it unanimously held that the Privacy Commissioner of Canada does not have the power to compel production of records over which an organization claims solicitor-client privilege. In doing so, the Court affirmed the well-established principle that solicitor-client privilege cannot be abrogated by inference and made its first comments yet on the mandate granted to the PCC by the Personal Information and Protection of Documents Act.

The dispute arose when the respondent to an access to personal information complaint refused to produce records of communications that it claimed to be subject to solicitor-client privilege. In demanding the records be produced, the Commissioner relied on the investigatory powers granted by section 12. Section 12 reads as follows:

12. (1) The Commissioner shall conduct an investigation in respect of a complaint and, for that purpose, may

(a) summon and enforce the appearance of persons before the Commissioner and compel them to give oral or written evidence on oath and to produce any records and things that the Commissioner considers necessary to investigate the complaint, in the same manner and to the same extent as a superior court of record

The Supreme Court held that this provision does not give the PCC the power to compel production of records over which solicitor-client is claimed by mere inference or by necessary implication in light of the PCC’s mandate.

While the principle that solicitor-client privilege can only be abrogated by express statutory language is not new, the Court’s application of the principle in this case demonstrates its strength because (as pointed out by the Information Commissioner in support of the PCC’s appeal), “verification of the privilege is the very object of the Privacy Commissioner’s statutory ombudsperson function and not merely a preliminary step to determine the record’s use for another purpose.”

The Court was not convinced by this argument, especially given the PCC’s mandate, which it characterized as adversarial rather than independent. Though the Court acknowledged that the validity of a solicitor-client privilege claim which is raised in response to a PIPEDA right of access request is of concern to the PCC given her mandate, it said her only valid means of seeking a determination of such a claim is to engage the Federal Court as she is empowered to do under the Act.

Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44.