Case Report – SCJ dismisses spoliation claim on its merits

This might be the first award in which the Ontario Superior Court of justice has considered a tort claim for spoliation since the Ontario Court of Appeal held, in Spasic Estate, that a claim based on the tort of spoliation should not be struck out for failing to disclose a reasonable cause of action.

The case is about a claim to the proceeds of an estate. The plaintiff established that the defendant arranged to have the testator’s computer wiped after the plaintiff threatened litigation and after he had received correspondence from the plaintiff’s counsel. The plaintiff also established that there was at least one e-mail destroyed (which was later produced from a third-party) which supported his claim that the defendant asserted undue influence over the testator.

In very brief treatment the Court seems to accept that a claim for tort damages for spoliation can be made out on mere proof of bad faith destruction of evidence. However, in rejecting the claim it implied that prejudice is also a requirement. It said:

In my opinion, this e-mail is no more unfavourable to William Jr. than other e-mails that he did produce that show his involvement with William Sr.’s dispute with Frank. In light of this and in view of the significant documents that William Sr. did produce, I am unable to conclude that William Jr. intentionally destroyed relevant evidence.

The Court did not consider whether the defendant had a positive duty to take reasonable steps to preserve the testator’s computer or the nature and extent of such a duty.

Tarling v. Tarling, 2008 CanLII 38264 (ON S.C.).

All About Information Turns One – Some Reflections

I’m notorious in my family for missing birthdays, but I’ve been thinking about this one for a while. I started blogging here one year ago, and after a bit of thought, have decided to go for another. It’s been entirely rewarding, though hard work too, and I’m still energized enough to carry on.

To commemorate this anniversary I thought I’d reflect on my experience and direct my thoughts to those of you in Canadian firms who are considering blogging. I specify “Canadian” because I sense we’re a lot more conservative than our American counter-parts. I also think, even now, that there’s a lot of space out there for Canadian law blogs.  Pick a niche or create a bizarre new one like I have. It would be great to see more people get on board. I’m sounding like the now-initiated, but perhaps that’s a perspective this birthday has earned.

Here are my thoughts.

Ask first. I really did wake up in the middle of the night, open up a WordPress account and start blogging. I must have been suffering from the same disease that makes so many people post dumb things online and later regret the consequences. When it dawned on me that this might be an issue with my employer, I approached “management” and tried to plead that the blog was my purely private activity. This was too insincere an argument for me to make (a management employment lawyer after all!) and I quickly abandoned my defence and asked for mercy. Thankfully, Hicks is extremely entrepreneurial in its outlook and was happy to let me continue on.

It’s a discipline. That’s the best thing about this for me. After tracking tracking legal developments and publishing internally for years as a research lawyer, I’ve really just taken my process outside the firm and have focused more on areas that are relevant to my own practice. I have a really hard time reading a case or an article closely if I’m not forced to do something with it, so blogging is a good way for me to develop knowledge of the substantive law. Yes, learning by doing is the superior form of professional development, but most of my practice is about developing tactics and strategies and finding practical solutions. Until I get to write facta on subjects I like for at least a few hours a day, this a relatively good way to stay current.

You’re not giving anything away that isn’t worth giving away. If you do start blogging, I bet you’ll have conversations with the more traditional lawyers in your firm who will lightly imply that you’re giving away valuable information to the competition. If you do, you should tell them that information is cheap. In keeping this blog, I aggregate information, organize it into a somewhat usable form and use a bit of my own style though its communication. I like to think that I’m providing an audience of contacts and potential contacts with value though this exercise, but this is hardly the highly-specialized application of our skills that contacts turned clients demand. I’m not a subscriber to the theory that the modern business organization is irrelevant given the growth of outside networks, but I do believe there is a net benefit to engaging in a reasonable degree of extra-firm information-sharing.

It’s about marketing, not sales. Speaking about the returns, they’re hard to measure. I’ve received a number of questions from individuals who want free advice and have drawn a firm lines to avoid slipping into engagements, but I have not really received any contact that has led directly to a retainer. Is this a problem given that I justify the great amount of time I spend on this based significantly on its business benefit? Not from my perspective. I’m not fooling myself or anyone else about the business benefits of blogging, which are more about marketing and profiling than sales. For me blogging is also about relationship-building, and this has been a great vehicle for pushing relevant content to my existing contacts and some new contacts. In the most-rewarding cases I’ve been able to develop a “behind the blog” dialogue on topics of mutual professional interest.

You will need to reckon with the privacy-related ramifications of you blog. I like doing case reports because they’re not associated with a great deal of personal exposure. To be honest, posts like this one, where I come out a little more and speak in a personal voice, make me extremely uncomfortable. At the same time, I feel a natural draw towards personal exposure that’s hard to resist, and understand that the real power of online social networking is derived from the nature of the content and not just the technology.  Is a blawg really a “blawg” if its published in the style of a firm newsletter?  If you try blawging, you’ll ultimately find a level of personal exposure suits your disposition.

You’re going to self-insure. You’ll face risks of both the legal and business kind.  And though it’s fairly easy to publish within the bounds of the law of defamation, there’s about a million subtle ways to offend a member of your firm’s client base (or a member of your firm for that matter). A disclaimer is essential – and I really am not expressing the views of my employer in this blog – but in they eyes of an upset client, a disclaimer may be insufficient. I had a good track record given my former role as a research lawyer role because I was part of a team that doubled as the Hicks’s external communications department. I suspect this gives the firm some comfort as I publish away relatively uncontrolled, but I don’t have any illusions about my ultimate accountability for what I write on this website.

Thanks to everyone who has shown an interest in the last 12 months, and I look forward to this next year!

Dan

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!