Case Report – Deemed undertaking protects against disclosure

On September 10th, a panel of the Divisional Court held that a motions judge erred in ordering a plaintiff in a disability insurance action to disclose a defence medical report and surveillance video that were prepared for and disclosed to the plaintiff in a prior tort action. The motions judge had ordered disclosure subject to the deemed undertaking’s constraint on use. The Divisional Court held that the disclosure order, absent an exercise of discretion under sub-rule 30.1.01(8), offended the rule. It also held that the reference to “use of evidence obtained in one proceeding” in sub-rule 30.1.01(6) does not support disclosure subject to a constraint on use:

The motion judge was concerned that under sub-rule 30.1.01(6) one could not use evidence from another proceeding to impeach the testimony of a witness, unless such evidence had been disclosed and therefore, impliedly, the Rule cannot be read to prohibit disclosure, but merely to restrict the use of such evidence once disclosed. We are of the view that sub-rule (6) allowing evidence from another proceeding to be used for impeachment refers to evidence which is lawfully in the hands of the examining party. Sub-rule (6) refers to “evidence obtained in one proceeding …”. We agree with the appellant’s submission that sub-rule (6) does not provide for or require the disclosure of protected evidence for use in impeaching testimony. It merely provides for the limited use of such evidence, when it is lawfully available.

Kitchenham v. AXA Insurance Canada, 2007 CanLII 37892 (ON S.C.D.C.).

Case report – Full access to hard drives ordered

On August 31, the Alberta Court of Queen’s Bench declared that the plaintiff in a departing employee case was entitled to enforce a default order that allowed it direct access to a number of hard drives it had seized earlier in executing an Anton Piller order.

The plaintiff was granted an Anton Piller order at the outset of litigation. It seized hard drives but did not inspect them.

As the litigation proceeded, a case management judge ordered the defendants to serve and file an affidavit of records by a certain date, failing which the plaintiffs would have direct access to the hard drives (subject to confidentiality terms to be agreed upon or ordered). The parties subsequently consented to a joint confidentiality order.

The Court held that the defendants did not provide an adequate affidavit of records because they did not disclose a number of records related to their involvement in a consortium that had bid successfully for a contract formerly held by the plaintiff and did not disclose all relevant e-mails and deleted files. It also held that the defendants should have produced the passwords, systems files and software necessary to access files in their native format and should have processed the electronic records for export into a litigation support software program.

The Court also rejected the defendants’ justifications. It held that the records pertaining to the consortium would be adequately protected by the implied undertaking rule and the joint confidentiality order. It also held that the defendants had not shown that electronic production (as ordered) would be unduly burdensome. On this point, the Court said:

The unusually high level of disclosure imposed in this case is justified by: the underlying fact that the defendants were employees of the plaintiff when they began working in competition with the plaintiff, the judicial determination that this was an appropriate case in which to issue an Anton Piller order, the size of the claim, which exceeds $50 million, and the great IT expertise of the parties which presupposes that at least some of the work required to provide the required level of disclosure can be done in-house.

Spar Aerospace Limited v. Aerowerks Engineering Inc., 2007 ABQB 543 (CanLII).