SCC issues civil production decision stressing discretion and proportionality

Today, a majority of the Supreme Court of Canada affirmed an order that directed the Competition Bureau and the federal Department of Public Prosecutions to produce, for civil discovery purposes, recordings of more than 220,000 private communications that they had obtained pursuant to Criminal Code wiretap authorizations.

Justices LeBel and Wagner wrote a majority judgement with which Chief Justice McLachlin (for the most part) concurred. The majority held that the production order was neither prohibited by the Criminal Code nor the Competition Act and was a proper exercise of discretion.

The discretion to order non-party production, according to the majority, is “great” (para 28), though should be exercised with a view to fulsome disclosure: “relevance is generally interpreted broadly at the exploratory stage of the proceedings” (para 30). Relevant records may be withheld to achieve proportionality and efficiency, but they may not be “unduly” withheld (para 60). In making a non-party production order a judge must consider the “financial and administrative burden” of the order and the impact on non-party privacy (paras 83 and 85).

The majority’s emphasis on balance and proportionality is heavy. It weaves proportionality into the concept of relevance as the concept applies in respect of civil production:

[30] To be relevant, the requested document must relate to the issues between the parties, be useful and be likely to contribute to resolving the issues (Glegg, at para. 23; Arkwright, at p. 2741; Chubb, at p. 762; Westfalia Surge Canada Co.; Autorité des marchés financiers; Fédération des infirmières et infirmiers du Québec).

[31] This relevance requirement ensures that the parties do not conduct “fishing expeditions”. It also ensures that the conduct of the proceedings is not delayed, complicated or even jeopardized by the introduction of evidence that does not assist in establishing the rights being claimed (see Royer and Lavallée, at p. 487; Marseille, at pp. 1 and 21). In this sense, the relevance rule is a procedural balancing rule that ensures the efficiency of the judicial process while facilitating the search for truth.

The majority refers to the 2005 decision in Glegg v Smith & Nephew Inc in which the Supreme Court of Canada espoused similar principles in respect of the production obligations of a party to an action. All the authorities the majority relies on are Quebec authorities, but the majority does not expressly rely on any provision of the Civil Code of Quebec and the principles it applies are broadly applicable.

Justice Abella, in dissent, argued that private communications intercepted by law enforcement are of utmost sensitivity and should be “protected by an almost impermeable legal coating like a privileged communication.” To achieve this purpose, she would have interpreted the Criminal Code to prohibit the production of intercepted private communications in a civil proceeding.

Imperial Oil v Jacques, 2014 SCC 66.

Case Report – Fiduciaries may prepare to depart

There is a line of case law in which Canadian courts have held that “ordinary employees” can take steps in preparing to compete post-departure without violating their duty of loyality and fidelity. In this August 17th Saskatchewan Court of Appeal cause case, the court held that fiduciaries may also take such preparatory steps provided they do not usurp a corporate opportunity or otherwise breach the trust upon which their fiduciary status is based. In other words, evidence of preparation alone is not enough to prove a breach. The court said:

Applying the case law to these activities, the trial judge did not err in saying that Mr. Fleming did not breach the fiduciary duty owed to his employer. The steps taken were of an exploratory nature only and fall easily into the category of contemplation and casual discussions with others. I reach this conclusion even though these were activities that would have resulted in a business capable of competing directly with Ryly’s, if they had come to fruition. To use Professor Flannigan’s analysis, however, Mr. Fleming did not reach the point of opportunistically diverting his employer’s resources to his or her own self interest rather than for the limited purpose authorized by the employer. No resource belonging to the employer was used in Mr. Fleming’s activities.

Calyniuk Restaurants Inc. v. Fleming, 2007 SKCA 85 (CanLII).