Man CA gives broad protection to lawyers’ reporting letters

On June 29th, the Court of Appeal of Manitoba held that the law has evolved such that reporting letters in real estate transactions (though often primarily summarizing facts) should be presumptively subject to solicitor-client privilege. It said, “Such correspondence is the direct result of a lawyer providing legal advice or otherwise acting as a lawyer, is descriptive of the services provided by the lawyer and arises as a result of the solicitor-client relationship.” This represents a change in Manitoba law, though is consistent with case law in other jurisdictions, including Ontario. 

R v Douglas, 2017 MBCA 63 (CanLII).

Party can call evidence about contents of lost video

On January 22nd, Vice-Chair Harris of the (Ontario) Grievance Settlement Board held that an employer can call testimony from witnesses who had viewed a video tape before it was inadvertently destroyed. He held that exclusion was an inappropriate remedy for inadvertent spoliation given the employer’s case rested on the proposed evidence. He also held that the proposed evidence was not hearsay and was not excluded because the best evidence was unavailable.

The overwhelming strength of the authorities is that such secondary evidence is admissible when the trier of fact is satisfied that the original existed, has been lost or destroyed and a proper explanation has been given of the absence of the better evidence. Here, that explanation has been given and accepted by the union.

Ontario Public Service Employees Union (Phagau) v Ontario (Liquor Control Board of Ontario), 2016 CanLII 7445 (ON GSB).

Arbitrator issues helpful video surveillance award

Arbitrator Paula Knopf’s May 19th video surveillance decision is helpful to management on two points.

First, she validates the management need to investigate wrongdoing rather than immediately confront a suspected wrongdoer: “if the suspected employees had been confronted with the Employer’s suspicions in late April or May as the Union suggested, while that might have had an immediate, albeit temporary, deterrent effect, that would have prevented any real hope of discovering the true extent of the problem.”

Second, Arbitrator Knopf analyzed whether inadmissibility was an appropriate remedy for the employer’s breach (rather than ruling the evidence to be inadmissible as an automatic consequence of the breach).

Ottawa-Carleton District School Board v Ontario Secondary School Teachers’ Federation, District 25, 2015 CanLII 27389 (ON LA).

Case Report – BCCA holds defence counsel may attend informer privilege hearing

On July 10th, the British Columbia Court of Appeal dismissed an appeal from an order which allowed defence counsel to be present at an in camera hearing to determine whether informer privilege was validly claimed. It did so by issuing three separate judgements and, in the end, is less authoritative than it is revealing of sharp divide on a key point of criminal procedure and the law of privilege.

The dispute arose in the context of a pre-trial application for disclosure by criminal defence counsel. In response, the Crown applied to call evidence to establish informer privileged in camera, excluding the public and defence counsel.  It filed a certificate under section 37(1) of the Canada Evidence Act, which establishes a procedure for objecting to the disclosure of evidence based on a “specified public interest” and which starts with a “first stage” hearing to determine whether the privilege has been validly claimed. The presiding judge decided to allow defence counsel to attend the first stage hearing in this case, but ordered them to refrain from disclosing information revealed to anyone, including their clients, and to file written undertakings with the Court promising the same.  

On appeal, the Crown argued the judge made an order that contemplated disclosure of the informant’s identity that was improper in light of the strict nature of the informer privilege. (All parties agreed the innocence at stake exception did not apply given the dispute arose in the context of pre-trial production.) Defence counsel argued that there was no order that contemplated such a disclosure from which appeal could lie and that, alternatively, the judge exercised her discretion properly in making the order.

The outcome was carried on separate but concurring rulings by Finch C.J. and Donald J.  They held that the presiding judge had made an order that contemplated disclosure of an informant’s identity to defence counsel but that the order was made in a proper exercise of discretion under section 37(5) of the Canada Evidence Act, which permits disclosure of information that is subject of a section 37(1) certification where the public interest in disclosure outweighs the public interest specified by the Crown.

More significantly, Finch C.J. and Ryan J. differed sharply in their opinion on the presiding judge’s exercise of discretion and whether that discretion may ever be exercised in a manner that allows defence counsel to attend a first stage hearing.

Ryan J. relied heavily on the Supreme Court of Canada’s recent decision in Named Person, which stresses that the informer privilege is a class-based rule which can only be abridged if necessary to establish innocence at stake in a criminal trial.  She held that allowing defence counsel to attend at a first stage hearing under a confidentiality undertaking would breach this rule and would place defence counsel in a a conflict of interest (torn between her duty to the court and client). Finally, she held that section 37 of the Canada Evidence Act does not alter the substance of the informer privilege (despite its reference to a balancing of interests):

In my view then, s. 37 of the Canada Evidence Act gives a trial judge the discretion to determine the type of hearing he or she will conduct and determine who may attend when a specified public interest issue is certified.  But this discretion must be read in light of whatever special public interest issue is at stake.  As I read the specified public interest provisions of the Canada Evidence Act, they provide a procedure for the airing of these issues, but they do not change their substantive content.  The centrepiece of informer privilege is the protection of the identity of the informer.  Nothing in s. 37 or the following provisions can be read to dilute that requirement.  It follows that the trial judge has a discretion as to what type of hearing to hold when the issues arise, but it must always be within the parameters prescribed by the privilege itself. 

Finch C.J. was in fundamental disagreement with Ryan J.  He held that Named Person was not authoritative because it only dealt with the media’s right to be present at first stage hearing and did not entail consideration of the special discretion granted by section 37 of the Canada Evidence Act.  He said:

That a judge has a broad discretion on applications brought under s. 37 is evident from the language used in that provision.  Under s. 37(5) the Court may order disclosure, even where such disclosure will encroach on a specified public interest, if the public interest in disclosure outweighs in importance the specified public interest.  The Court may attach conditions to a disclosure order under s. 37(5).

MacDonald J. agreed with the Chief Justice’s conclusion about the existence of a discretion to invite defence counsel to a first stage hearing, but wrote a separate, short and much more reserved judgement.

R. v. Virk, Basi and Basi, 2008 BCCA 297.

Case Report – Adverse inference drawn based on negligent spoliation

On February 27th, the New Brunswick Court of Queen’s bench dismissed a counterclaim because the plaintiff (by counterclaim) had allowed documents that the defendant required for its defence to be destroyed.

After terminating its franchise agreement with the defendant, the plaintiff transferred a job order file on an over-bid construction project to the new franchisee, who destroyed the file. The defendant (by counterclaim) did not allege bad faith, but alleged that the plaintiff ought to have instructed the new franchisee to safeguard the files, which were essential to its defence. The Court rejected the plaintiff’s claim that the defendant did not call an available witness in favour of raising its spoliation defence. It also held that the plaintiff had a duty to preserve the job order files that was bolstered by its own termination letter, which said it would make the records available to the defendant in the event of litigation.

Elliott v. Trane Canada Inc., 2008 NBQB 79.

Case Report – Pornographic images to be preserved but not produced

On October 2nd, the U.S. District Court for the District of Columbia ordered a plaintiff in a harassment suit to preserve six pornographic images portraying homosexual acts and allow one of the defendant’s lawyers to inspect the images.

Magistrate Judge Facciola accepted that the images were relevant to the defendant’s claim that the alleged harassment was “unwelcome.” (The test for harassment under Canadian law also includes a subjective component.) In the his view, however, relevance alone did not justify production because of the plaintiff’s competing privacy interest and because the images would not clearly be admissible at trial. In response to the defendant’s argument that a party to litigation is entitled to the production of evidence that is “reasonably calculated to lead to the discovery of admissible evidence,” Magistrate Judge Facciola held that the defendant’s purpose for seeking the images (which was to admit them as evidence of the plaintiff’s own standard of behaviour) meant that the issue of discoverability and the issue of admissibility were inseparable.

Smith v. Cafe Asia (2 October 2007, Dist. Ct. D.C.).