Case Report – BCCA sets aside Anton Piller order because findings in prior order were inadmissible

On May 7th, the British Columbia Court of Appeal set aside an Anton Piller order obtained by the Crown against acquitted Air India bombing defendant Ripudaman Singh Malik and his family members.

The Court filed an action against Malik and family members to recover monies paid to support his defence in the Air India trial. The monies were paid pursuant to an agreement that was premised on an agreement by Mr. Malik to transfer his assets to the Crown. When he did not make the transfer, the Crown refused to continue funding Mr. Malik’s defence. In response, Mr. Malik brought a “Rowbotham” application for a state-funded defence. He was unsuccessful, but reached a subsequent agreement with the Crown and was eventually acquitted.

The Crown sued for repayment of advances made under the first agreement. It claimed it entered the agreement based on misrepresentations and claimed that Mr. Malik and his family members conspired to hide assets and hinder the Crown’s collection of monies owed. The Crown obtained a Mareva injunction and Anton Piller by submitting and relying heavily upon the judge’s finding in the Rowbotham application.

The Court of Appeal held that the Crown had not established a strong prima facie case of fraud nor had it shown a real possibility the defendants would destroy any incriminating documents that may be in their possession because only some of the judge’s findings from the Rowbotham application were admissible. The Court characterized findings in the Rowbotham application as follows:

The conclusion reached by Stromberg-Stein J. was that Mr. Malik had the means to pay for, or make a contribution towards, his defence costs. Her conclusion was based on her finding that Mr. Malik could look to the income and assets of his family, as well as his own assets, because the assets of Mr. Malik and his family were fused. In the alternative, Stromberg-Stein J. would have decided the application on the issue that Mr. Malik had disentitled himself to relief because he had not prioritized his legal expenses over other expenses.

The Court held that Mr. Malik could not be bound by the application judge’s alternative finding in a subsequent proceeding because it was a collateral finding. It explained that the doctrines of issue estoppel and abuse of process, “will not prevent a person from re-litigating findings that were collaterally made by the court and were not fundamental to the decision in the earlier proceeding.”

Also notable is the Court’s finding that the jurisdiction to order an Anton Piller flows from a superior court’s inherent jurisdiction. It rejected an argument that the British Columbia Supreme Court has no jurisdiction to order an Anton Piller because the Court’s rule-based power to preserve property on an interim basis is narrowly worded.

Note that the Court did preserve the Mareva injunction against Mr. Malik alone based on a finding that the Crown had prima facie claim for an equitable interest in his property and otherwise met the test for an injunction.

British Columbia v. Malik, 2009 BCCA 201.

Case Report – US Supreme Court revives FOI request precluded as res judicata

On June 12th, the Supreme Court of the United States unanimously held that an FOI claim filed by an acquaintance of a person who was unsuccessful in previously filing the same claim should not be barred.

The first requester asked the Federal Aviation Administration for technical documents related to a model of vintage airplane he owned and was seeking to restore. The FAA denied the request based on the FOIA’s third-party trade secrets exemption. The first requester eventually filed a lawsuit that was heard by the Tenth Circuit Court of Appeals. The Tenth Circuit upheld the lower court’s finding that the third-party restored its right to protect the records (despite an earlier waiver) by objecting after the FOI request had been filed. It did, however, significantly qualify its decision by noting that the first requester had not challenged whether it was possible to “restore” trade-secret status once waived and, if so, whether the timing of the third-party’s objection enabled such restoration.

The second requester then filed the same request and eventually filed suit, but was barred in the first instance and on appeal based on a finding that he was “virtually represented” by the first requester. The virtual representation doctrine expands the traditional exceptions (in American federal law) to the rule that one must be a party to be barred by a prior judgement. It had not previously been considered by the Supreme Court.

The Supreme Court rejected the virtual representation doctrine but remanded the matter for a determination as to whether the second requester filed suit as the first requester’s agent. This may have seemed a possibility to the Court because the first requester had a greater interest in the records (he owned the aircraft, the second requester did not) and had asked the second requester to help him restore the aircraft and because both requesters used the same legal counsel. There was no determination of the question of agency on the record, however, so the Court let the agency issue live with a note that “courts should be cautious about finding preclusion on this basis.”

The Supreme Court’s decision does not turn on the specific nature of a public right of access, though it did reject an argument that the second requester had a reduced interest in controlling the first reqeuster’s litigation because a duty to disclose is “owed the public generally.” It said, that notwithstanding the general public interest in access to government records, a grant of relief under the FOIA is personal.

Taylor v. Sturgell, 553 U.S. 2008.