Federal Court of Appeal – litigation database privileged, no production based on balancing

On October 20th, the Federal Court of Appeal set aside an order that required the federal Crown to disclose the field names it had used in its litigation database along with the rules used to populate the fields. It held the order infringed the Crown’s litigation privilege.

The case management judge made the order in a residential schools abuse class action. The Crown had produced approximately 50,000 documents, with many more to come. The plaintiffs sought the fields and rules (and not the data in the fields) to facilitate their review. The case management judge, though acknowledging litigation privilege, judged the fields and rules as less revealing than the data in the fields and ordered production in the name of efficient procedure.

The Court of Appeal held that the case management judge erred because they “subordinated the Crown’s substantive right to litigation privilege to procedural rules and practice principles.” It also held, “a party attempting to defeat litigation privilege must identify an exception to litigation privilege and not simply urge the Court to engage in a balancing exercise on a case-by-case basis.”

Canada v. Tk’emlúps te Secwépemc First Nation, 2020 FCA 179 (CanLII).

NSCA issues principled judgement on relevance standard for production and proportionality

On February 28th, the Nova Scotia Court of Appeal held that a motor vehicle accident plaintiff was not entitled to production of her insurer’s policy documents merely because she had alleged bad faith. It held that these documents might be relevant, but the plaintiff failed to meet an evidentiary burden to establish relevance. Justice Farrar explained:

Although the pleadings are a factor to be taken into consideration in determining whether documents are relevant, they are not the only factor.  If that were the case, adroit counsel could draft pleadings in such a manner to allow a party to embark on a fishing expedition.  This is precisely what the Rules were intended to avoid when they were amended to move from the “semblance of relevance” test to relevancy.  The motions judge’s decision, in my view, reverts to the “semblance of relevance” test.  Allegations, no matter how specifically worded or drafted, which have no basis in the facts or the evidence without more, cannot be the basis for a production application.  This is particularly true here, where there was a dearth of evidence before the motions judge.

Intact Insurance Company v. Malloy, 2020 NSCA 18 (CanLII).

NSCA addresses relevance, prorportionality and privacy in the ordering of forensic hard drive reviews

On January 28th, the Nova Scotia Court of Appeal affirmed an order that required a plaintiff to produce a hard drive for forensic review because it contained data relevant to his lost income claim (i.e., the amount of time he spent working at a home office each day).

The Court held that the data was relevant and therefore producible subject to rebuttal by the plaintiff. It set out the following list of factors for Nova Scotia judges to consider in deciding whether or not to grant production in similar cases:

1. Connection: What is the nature of the claim and how do the issues and circumstances relate to the information sought to be produced?

2. Proximity: How close is the connection between the sought-after information, and the matters that are in dispute? Demonstrating that there is a close connection would weigh in favour of its compelled disclosure; whereas a distant connection would weigh against its forced production;

3. Discoverability: What are the prospects that the sought-after information will be discoverable in the ordered search? A reasonable prospect or chance that it can be discovered will weigh in favour of its compelled disclosure.

4. Reliability: What are the prospects that if the sought-after information is discovered, the data will be reliable (for example, has not been adulterated by other unidentified non-party users)?

5. Proportionality: Will the anticipated time and expense required to discover the sought-after information be reasonable having regard to the importance of the sought-after information to the issues in dispute?

6. Alternative Measures: Are there other, less intrusive means available to the applicant, to obtain the sought-after information?

7. Privacy: What safeguards have been put in place to ensure that the legitimate privacy interests of anyone affected by the sought-after order will be protected?

8. Balancing: What is the result when one weighs the privacy interests of the individual; the public interest in the search for truth; fairness to the litigants who have engaged the court’s process; and the court’s responsibility to ensure effective management of time and resources?

9. Objectivity: Will the proposed analysis of the information be conducted by an independent and duly qualified third party expert?

10. Limits: What terms and conditions ought to be contained in the production order to achieve the object of the Rules which is to ensure the just, speedy and inexpensive determination of every proceeding?

The Court also suggested that, although “the semblance of relevance” test for production has been abolished under the Nova Scotia Rules, in gleaning what might ultimately be relevant at trial, “it is better to err on the side of requiring disclosure of material that, with the benefit of hindsight, is determined to be irrelevant rather than refusing disclosure of material that subsequently appears to have been relevant.”

Laushway v Messervey, 2014 NSCA 7 (CanLII)

Master McLeod sets out parameters of hard drive review

Last September Master McLeod of the Ontario Superior Court of Justice issued an e-discovery order that was just brought to my attention and that makes some points about the discovery of a hard drive.

The order involves an external hard drive that a departed employee (and defendant) admitted contained his former employer’s (and plaintiff’s) information and turned over to plaintiff counsel for “forensic review.” Plaintiff counsel did not use a forensic IT specialist to review the drive. It reviewed the drive itself and segregated a number of potentially privileged files. It also discovered over 400 zip files that contained backups of information from the defendant’s personal laptop.

Master McLeod held that the defendant should review the files that plaintiff counsel had segregated as potentially privileged. In doing so, he commented that there was an honest misunderstanding about the meaning of “forensic review” and that plaintiff counsel took adequate steps to protect itself from exposure to privileged communications. Nonetheless, according to Master McLeod “conducting the document review in house without specific agreement or disclosure was less than prudent.”

Master McLeod also held that the plaintiff could continue to review the 400 plus zip files through its forensic expert. He said:

In my view this kind of analysis is best conducted by an arm’s length expert for two reasons. The first is that the data ostensibly belongs to the opposing party and will contain irrelevant confidential information (as anticipated) and apparently privileged information (which does not appear to have been anticipated by the defendant at least). The second reason is that the personnel conducting the analysis may have to be witnesses at trial and that militates against the use of in house I.T. or paralegal staff.

Notably, Master McLeod rejected a defendant argument that the zip files should not be reviewed at all based on a statement in the Sedona Canada Principles that indicates recourse to backup files should not ordinarily be within the scope of production. He held that, In the circumstances, the backup files were a potentially critical source of evidence that the plaintiff was prepared to review. The plaintiff would bear the cost of the review subject to cost recovery at the end of the day.

Descartes v Trademerit, 2012 ONSC 5283.

Existence of unfound docs no reason to allow a hard drive inspection (Ontario)

On December 19th, Justice Morgan of the Ontario Superior Court of Justice made the following statement of principle in dismissing a request to inspect a party’s hard drive that followed the party’s service of a supplementary affidavit of documents:

Plaintiff’s counsel submits that computers do not err, and the fact that a document was overlooked the first time implies that the search was unredeemably deficient. However, computer storage and search systems, like traditional filing systems, are subject to human error. The Defendant’s obligation is to make every effort to produce what the Rules require it to produce, but there must be evidence stronger than a corrected error for a court to order that the Plaintiff actually take control of the search through the Defendant’s computer hard drive.

Justice Morgan also dismissed a request for an order requiring the provision of information about how the party’s electronic search was conducted. He commented that the Rules “do not require a party to explain how or where the relevant documents were found or the methodology of its search for those documents.”

Zenex Enterprises v Pioneer Balloon, 2012 ONSC 7243 (CanLII).

Case Report – Master denies relief, says parties should have engaged in discovery planning

On November 2nd, Master McLeod of the Ontario Superior Court of justice dismissed a motion that sought an order to deal with alleged over-production because the parties did not collaborate in developing a discovery plan. He said the following about discovery planning:

Discovery planning is intended to permit the parties to map out the most efficient and effective way to organize the production and discovery needs of the particular action having regard to the complexity of the records, the issues in dispute and the amounts at stake. It cannot be an adversarial exercise. Planning is also intended to minimize the need for court intervention but obviously there will be situations in which there are legitimate disagreements. In a case managed environment a case conference may resolve this and in other cases the same end may be achieved by a motion for directions. Specific direction could have been sought on any of the occasions that this matter was previously before the court.

A case conference or a motion for directions may well involve competing discovery plans but establishing efficient and effective procedures for these matters must not itself become an occasion for adversarial advocacy. If that occurs the whole point of the exercise will be defeated. Certainly obtaining direction from the court should not normally require lengthy affidavits, voluminous documents, factums and briefs of authorities. A contested motion is a poor planning forum.

The parties were engaged in a construction lien action, but agreed to exchange production. Master McLeod stressed that an exchange of production in accordance with the Rules can be very wasteful in construction lien actions, but nonetheless denied relief. He said, “It is not appropriate to proceed without a plan and then to launch a motion that implies the other party is in breach of the rules or is doing its production wrong.”

Hat tip to Peg Duncan.

Lecompte v. Doran, 2010 ONSC 6290 (CanLII).

Case Report – Court dismisses request to limit production of e-mails

On April 26th, the Newfoundland and Labrador Supreme Court – Trial division dismissed an application to limit production of e-mails.

The defendant (and plaintiff by counterclaim) in a departing employee dispute brought the application. It sought relief from a consent order requiring to search, review and produce e-mails of thirteen custodians based on a list of stipulated terms, including e-mails in active storage and e-mails in archive or backup systems. Having produced some e-mails under the order, the defendant asked for any further production obligations under the order to be terminated and, alternatively, for an order for further production to be based on proven need and/or cost shifting.

The Court was not satisfied that limiting production was warranted based on the defendant’s evidence, which it said “boiled down” to evidence of current efforts and costs and technical difficulties in meeting the order. Its reasoning suggests that the defendant’s evidence of bare cost alone (some of which it questioned) did not impugn the process embodied in the consent order, which it presumed was proportionate and of reasonable quality. The Court did receive evidence that an element of the process was flawed in that a search for the words “Newfoundland” generated a large number of responsive records for one custodian. In response, the Court held this search term was “too broad to be useful” and directed the parties to discuss the matter.

GRI Simulations Inc. v. Oceaneering International Inc., 2010 NLTD 85 (CanLII).

Case Report – Nova Scotia judgment a sign of things to come on litigation and non-party privacy?

On June 30th, the Nova Scotia Supreme Court issued a judgment in which it dismissed a motion for production of documents. Though a routine motion, the Court’s reasoning may demonstrate a more modern approach to production in civil disputes, and one arguably invited by the pending changes to Ontario’s Rules of Civil Procedure.

The plaintiffs brought a motion for production in furtherance of their action against an investment dealer and an individual investment advisor. They sought documents pertaining to complaints brought by other clients against the advisor based on a claim that the dealer failed to supervise the advisor. The Court applied the “semblance of relevance” test called for by Nova Scotia’s now-replaced Civil Procedure Rules and held that the records should not be produced. Though it framed its analysis as being about relevance, the Court clearly weighed the relative value of production against its impact on non-party privacy:

In my view, the documents pertaining to other clients’ trading accounts handled by Mr. Bagnell under Mr. Youden’s supervision fail to meet the test of relevancy. Similar act evidence of this sort has little probative value to an examination of the handling of the plaintiffs’ trading accounts and in my opinion, is not necessary for disposing fairly of the proceeding. The subject allegation of inadequate supervision, whether framed in negligence or as a breach of fiduciary duty or breach of contract, will require the court to determine the appropriate standard of care and/or scope of fiduciary duty owed to the plaintiffs. That is going to be informed largely by evidence of industry standards and practices, the workplace manuals of RBCDS pertaining thereto (which already have been produced), the contract between the parties, and perhaps the introduction of expert opinion evidence. How Mr. Youden supervised the trading accounts of other clients of Mr. Bagnell would have little probative value in this determination, especially where different clients often have different investment objectives and risk tolerances in their trading activities. I am simply not persuaded that the production of these records would likely lead to the discovery of admissible evidence in this action…

The second reason for denying this application is based on confidentiality concerns. If the documents sought were ordered to be produced, there would be some unknown number and identity of other clients whose personal financial affairs would now be disclosed in this litigation, unbeknownst to them. Personal financial information is a very private and sensitive subject to most individuals. While I recognize that the implied undertaking rule would offer some protection, confidentiality concerns nonetheless remain and in the absence of any compelling argument of relevance such that the production of these documents is necessary for disposing fairly of the proceeding, those confidentiality concerns become an added reason for the dismissal of this application.

This is arguably the type of reasoning that will be invited when Ontario’s new Rules of Civil Procedure come into force on January 1, 2010. The landmark changes to the Rules will be brought in by O. Reg 438/08. This amending regulation will establish proportionality as a governing principle for interpreting the Rules, establish bare relevance as the threshold for production and establish a list of factors that a judge or master should consider in making discovery-related orders. The amendments do not expressly contemplate protection of non-party privacy as a relevant factor, and the impetus to the Rule changes (the Osborne Report) is primarily about affordability of civil justice as between parties to litigation. The changes do, however, invite a more nuanced approach to civil production, and the balancing of non-party privacy interests reflected in this Nova Scotia case may become more common.

MacGowan v. RBC Dominion Securities Inc., 2008 NSSC 421.

Case Report – BCCA deals with production of class member records in proportionality decision

In a February 13th oral judgement, the British Columbia Court of Appeal affirmed an order that required the province to produce records pertaining to class members who had not opted out of a class proceeding.

The proceeding alleges systemic negligence and breach of fiduciary in the operation of a residential school. In ordering production of records related to individuals who had not opted out of a potential class of up to 2,200 members, the Court affirmed three findings:

  1. that production should not be denied because of the records’ potential misuse as evidence of individual incidents (given their prima facie relevance to the systemic breach claims); 
  2. that production should not be denied based on privacy concerns given that potential class members were given notice and an opportunity to protect their files from disclosure by opting out; and
  3. that production should not be denied based on the scope of production (about 2.2 million pages of records), noting that the production request was not “a futile search for documents of unknown relevance.”

As the concept of “proportional” production takes greater prominence in Canadian civil procedure, this case is a nice illustration of how the cost of production can have various elements. One might argue that it demonstrates a rather traditional or fulsome-production view, where costs related to procedural complications and delay, privacy and document review do not weigh heavily in the balance.

Richard v. British Columbia, 2009 BCCA 77.

Case Report – BCCA rejects request to postpone production to aid a test of credibility

On November 19th, the British Columbia Court of Appeal dismissed a defendant’s motion to postpone the production of a non-privileged video surveillance tape so it could better test the plaintiff’s credibility in oral discovery.

The dispute was about the discretion to order relief from production that is granted expressly by Rule 26(1.2) of the British Columbia Supreme Court Rules. The essence of the Court of Appeal’s decision is captured in the following excerpt:

In my view, it is the extensive scope of this common law disclosure rule that created the need for reasonable limitations.  Stated in another way, it is the “slavish” application of R. 26(1) which informs the scope of R. 26 (1.2). 

The appellants seek to distinguish these decisions under R. 26(1.2) on the basis that they do not involve a key issue of credibility. They submit that, in this case, an order postponing the production of the surveillance videotapes would give them the opportunity to test the willingness of the respondent to lie about her claim.  They argue that, in the absence of such an order, the respondent might tailor her evidence to fit the scenario depicted in the videotape. 

With respect, I do not accept this argument as representing a valid purpose for an application of R. 26(1.2).  In this case, there has been no factual determination regarding the respondent’s truthfulness, or lack thereof.  This is the appellants’ theory of liability, and it is for them to establish in the course of the trial.  Nor am I persuaded that the Rules of Court were intended to be used in a manner that would displace a right of a party granted under them, in favour of creating an opportunity for an adverse party to advance their theory of a fact in issue.

This excerpt followed a detailed lead-in on how Rule 26(1.2) has been applied to protect privacy (by allowing for the redaction of non-relevant and sensitive information) and to encourage proportionality in production. The only other jurisdiction with a comparable provision is the Federal Court (see section 230 of the Federal Court Rules).

Stephen v. McGillivray, 2008 BCCA 472.