CITATION: Orbixa v. Ribeiro, 2015 ONSC 7184
DIVISIONAL COURT FILE NO.: 407/15
DATE: 20151204
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: ORBIXA TECHNOLOGIES INC., Plaintiff
AND:
OSCAR RIBEIRO, KAMAL NAMSOURI, EIDOLONG SYSTEMS LTD., AND JITNEYTRADE INC., Defendants
BEFORE: Mr. Justice H. J. Wilton-Siegel
COUNSEL: Morris Cooper, for the Plaintiff
Caitlin R. Sainsbury, for the Defendants
HEARD at Toronto: in Writing
ENDORSEMENT
Introduction
[1] The plaintiff, Orbixa Technologies Inc. (the “plaintiff” or “Orbixa”), seeks leave to appeal from the order of Faieta J. dated July 30, 2015 (the “Order”). The Order upheld a decision of Master Graham dated May 20, 2015 (the “Master’s Decision”) for reasons set out in a decision of the Motion Judge also dated July 30, 2015 (the “Decision”). The Master’s Decision denied two separate claims for relief from the deemed undertaking rule in respect of documentary productions made in three proceedings which have been ordered to be tried together.
[2] The plaintiff’s action against JitneyTrade Inc. (“JitneyTrade”) is for damages for the alleged misappropriation of confidential information acquired while JitneyTrade was acting as the registered investment dealer for the plaintiff’s principal customer, Calm Ocean Limited Partnership ("COLP"), and for misuse of that information to compete with the plaintiff and COLP.
[3] In an action brought by True North Vantage Inc. (“True North”), which engages in day-trading on the Toronto Stock Exchange and other stock markets in Canada and around the world, True North seeks damages against a former employee Steven Pang (“Pang”). Pang was a day-trade manager and the founder of another defendant in that action, Oasis World Trading Inc. (“Oasis”). True North alleges that Pang incorporated Oasis to compete with it contrary to his manager agreement with True North. True North further alleges that Pang and his competing business used software misappropriated from Orbixa and proprietary information wrongfully communicated to them by JitneyTrade.
[4] The plaintiff alleges that, during the course of production and examinations for discovery in these actions, it obtained evidence of infractions of Canadian securities laws committed by JitneyTrade and certain of its employees. It wishes to file a formal complaint with the regulatory authorities that oversee JitneyTrade and, for such purpose, to disclose this evidence to regulatory authorities.
[5] The plaintiff also alleges that Pang has given testimony by way of oral discovery that constitutes perjury in prior injunction proceedings in the True North action. The plaintiff wishes to disclose to certain police services and the Crown Attorney’s office documentary evidence that it considers to be evidence of such perjury for the purposes of an investigation into this alleged wrongdoing.
[6] The order providing that the three actions shall be tried together also provided that the deemed undertaking rule and the common law implied undertaking rule does not apply, as between the parties in the three actions, to the evidence or information obtained from the documentary discovery or examinations for discovery in these actions but is not otherwise waived. The plaintiff believes that all of the evidence that it seeks to disclose to such parties therefore falls within the scope of the deemed undertaking rule set out in Rule 30.1.01(3) of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194. Accordingly, the plaintiff sought leave from the Master, pursuant to Rule 30.1.01(8), to rely on such evidence for the aforementioned purposes.
[7] In relation to the JitneyTrade matter, the plaintiff sought leave to provide the regulators with documentation of JitneyTrade that the latter had provided in the plaintiff’s action. In relation to the Pang matter, the transcript at issue containing Pang’s sworn testimony was apparently a matter of public record. The plaintiff wishes to rely on documentary productions of the defendants in the plaintiff’s action, including JitneyTrade. Apparently, none of the defendants in the plaintiff’s action opposed this relief.
The Master’s Decision
[8] The Master referred to the decision of the Supreme Court in Juman v. Doucette, 2008 SCC 8, [2008] 1 S.C.R. 157 as the prevailing authority on the issue of relief from the provisions of the deemed undertaking rule.
[9] After reviewing the relevant passages in Juman, which are set out below, the Master then set out the approach to the issues before him that he considered was mandated by that decision:
…, on this motion, the court must consider whether the moving party has demonstrated sufficiently exceptional circumstances that would favour a broader public interest in disclosure such as would warrant overriding the deemed undertaking. Based on the passages highlighted in paragraphs 30 and 44 of Juman, the court must consider the substance of the evidence on which the moving party relies in support of its request for relief from compliance with the deemed undertaking rule.
[10] With respect to the disclosure pertaining to JitneyTrade, the Master’s reasoning for the dismissal of the plaintiff’s motion is set out in paragraph 19 as follows:
The evidence in paragraph 4 of Orbixa's affidavit in support of the motion consists of a very general statement that Orbixa has uncovered evidence of infractions by JitneyTrade of Canadian securities laws and regulations. The only more specific statement is that JitneyTrade received confidential trade records generated by Orbixa and used those records to negotiate with co-defendants to allow them to launch a competing business but those records have not been put before the court. In order to persuade the court that the deemed undertaking should not apply to discovery evidence, the moving party must provide evidence to justify the order sought. In the case of evidence that would purportedly substantiate regulatory violations, such evidence should support a prima facie case. The evidence in this case, which is limited to a very general allegation based on what the moving party admits to be speculation and another statement based on documents not put before the court, is insufficient to meet that onus and the motion is dismissed.
[11] I note that the Master’s description of the paucity of evidence in support of the alleged infractions of JitneyTrade is borne out in the record.
[12] With respect to the disclosure pertaining to Pang, the basis of the dismissal is set out in paragraphs 26-28 of the Decision as follows:
I accept the submission of Pang's counsel that the statements on which Orbixa relies to support its allegations that Pang has perjured himself are not proper affidavit evidence. Mr. Beck's statement in paragraph 11 that he has concluded that Pang lied and committed perjury is a conclusion of law for which no foundation is provided other than by way of a general reference to the testimony and documents of "the other defendants". In paragraph 12, Mr. Beck purports to present evidence that would contradict Mr. Pang's without stating the source of and particularizing that contradictory evidence, and indicating that he believes the source.
In Juman v. Doucette, supra, the Supreme Court states that a court should order that the deemed undertaking rule not apply only in exceptional circumstances and that on a motion to determine the issue, the court "would have access to the documents or transcripts at issue". In this case, there are no such documents or transcripts before the court and therefore, there is no basis on which the court could conclude that the exceptional circumstances required to relieve from the deemed undertaking rule are present.
I accept that it is not the function of the court hearing a motion under rule 30.1.01(8) to predict the outcome of a criminal charge that may arise from evidence exempted from the deemed undertaking rule. However, it is still incumbent on a party seeking relief from that rule for the purpose of supporting a criminal prosecution to put the evidence sought to be disclosed before the reviewing court to demonstrate at least a prima facie case. Although the court in Bowman v. Zibotics, supra did conclude that the deemed undertaking rule should not apply to transcripts to be used in a private prosecution for perjury, the judge in that case did not conduct any analysis of the transcripts as contemplated by the Supreme Court in Juman. Bowman did not alter the principles stated in Juman and the judge's finding in that case is not binding on me. In the absence of any admissible evidence that could support a charge of perjury, the motion for an order that the deemed undertaking rule does not apply to the evidence of Pang is dismissed.
[13] From the foregoing, it is clear that the Master denied the plaintiff’s motion in respect of the disclosure pertaining to Pang on the following grounds. First, the affidavit of Peter Beck, sworn September 4, 2014 in support of the motion, was not admissible under Rule 4.06(2) and Rule 39.01(4) of the Rules of Civil Procedure, as it was based on information and belief but failed to set out the source of the information. Second, in any event, the affidavit evidence consisted of bald allegations that were not supported by any transcript or documentary evidence. In reaching this conclusion, the Master held that the decision in Bowman et al. v. Zibotics, 2010 ONSC 4422, [2010] O.J. No. 3393 did not alter the principles articulated in Juman which, in any event, governed the present circumstances. Accordingly, there was no basis on which the Master could conclude that the exceptional circumstances required to obtain relief from the deemed undertaking rule were present.
The Decision of the Motion Judge
[14] The plaintiff appealed the Master’s Decision to the Superior Court. As mentioned, the Motion Judge dismissed the appeal.
[15] The Motion Judge upheld the Master’s Decision with respect to the documentation pertaining to JitneyTrade in paragraphs 29 and 30 of the Decision as follows:
…, Juman requires that a Court be: (1) given the documentary evidence to be revealed; and (2) advised of the alleged regulatory or criminal offence revealed by the documentary evidence so that the Court may weigh the "evidence" (for instance, as noted in Juman at para. 43, is the evidence mere suspicion or blatant admission, peripheral clues or direct evidence?), and weigh the seriousness of the alleged offence (for instance, consider whether there is any apparent use to which the police may put this material or, in other words, is there any basis for the assertion that the documentary evidence discloses a contravention of the law). Once these assessments are made, the Court can then weigh other considerations identified by the parties in order to determine whether the interests of justice, as reflected by the reasons given to justify the disclosure of the documents, outweigh on a balance of probabilities any resulting prejudice in accordance with subrule 31.1.01(8) of the Rules of Civil Procedure.
Although I would have articulated the test differently, I agree with Master Graham's dismissal of this motion. The evidence adduced by the Appellant did not provide the Court with a sufficient evidentiary basis to justify granting its motion. The Appellant did not provide the Court with the documentary evidence to be revealed nor did it identify the alleged regulatory offence. The Appellant's allegations of Jitney's regulatory contravention were only speculative. On cross-examination Peter Beck admitted that he had no evidence that Jitney supplied Ribeiro or Mansouri with confidential information to assist them in setting up their competing business and this alleged wrongdoing was based on speculation. The fact that Jitney has volunteered to provide these documents to the IIROC, if requested to do so by IIROC, is another factor to be considered. In my view, the interests of justice are not served by the disclosure of discovery documents in these circumstances. In any event, in light of these circumstances, including the lack of any evidence before this Court that describes the specific regulatory provision allegedly breached for which the documents are to be disclosed to the regulator, supports the view that this conclusion would have been justified even if the "improper motive" test used in Bowman and Linchris was applied.
[16] The Motion Judge upheld the Master’s Decision in respect of the documentation pertaining to Pang in paragraphs 33-35 of the Decision, which endorsed the Master’s reasoning as follows:
The Master did not err in law in dismissing the motion for the above reasons. The affidavit failed to comply with the Rule 4.06(2) and Rule 39.01(4) of the Rules of Civil Procedure. The Court cannot admit affidavit evidence that is beyond the deponent's personal knowledge if it does not disclose the source of the information.
Orbixa took the position that even if such evidence was not admissible, it was not required, as the Court in Bowman allowed documentary discovery to be used in a private prosecution for perjury without an analysis of the allegations. For the reasons given, more than the absence of improper motives must be demonstrated in order for Orbixa to be relieved from the deemed undertaking rule.
It is my view that the documentary evidence that is sought to be released must be placed before the Court along with any other "evidence" of perjury in order to allow the Court to weigh the various factors required by Juman. I find that the Court did not err in ruling that there was no basis on which the Court could conclude that the exceptional circumstances required to relieve Orbixa from the deemed undertaking rule were present.
Standard of Appeal
[17] The standard of appeal of the Master’s Decision is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 3-6, 10-12; Zeitoun v. Economical Insurance Group (2008), 91 O.R. (3d) 131 (Div. Ct.), para. 38-41, aff'd (2009), 2009 ONCA 415, 96 O.R. (3d) 639 (C.A), at para 1. It is not suggested that the Motion Judge applied an incorrect standard on the appeal before him.
Test for Leave to Appeal
[18] The test for granting leave to appeal under Rule 62.02(4) is well-settled. It is recognized that leave should not be easily granted and the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.
[19] Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere (but not a lower level court) and that it is, in the opinion of the judge hearing the motion, “desirable that leave to appeal be granted.” A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: see Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542 (Div. Ct.).
[20] Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to “very serious debate”: see Nazari v. OTIP/RAEO Insurance Company Inc.., [2003] O.J. No. 3442 (S.C., per Then J.); Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 282 (Gen. Div., per Farley J.). In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice: see Rankin v. McLeod, Young, Weir Ltd. et al. (1986), 57 O.R. (2d) 569 (H.C.J., per Catzman J.); Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 110 (Div. Ct.).
Applicable Law
[21] As mentioned the prevailing authority on the issue of relief from the provisions of the deemed undertaking rule is the decision of the Supreme Court in Juman. In that decision, Binnie J. had the following comments at paragraphs 30, 32, 38 and 44 in respect of relief against the deemed undertaking rule, which principles are relevant for the issues on this appeal:
… Thus, where the party being discovered does not consent, a party bound by the undertaking may apply to the court for leave to use the information or documents otherwise than in the action, as described in Lac d'Amiante, 2001 SCC 51, [2001] 2 S.C.R. 743 at para. 77:
Before using information, however, the party in question will have to apply for leave, specifying the purposes of using the information and the reasons why it is justified, and both sides will have to be heard on the application.
In such an application the judge would have access to the documents or transcripts at issue.…
An application to modify or relieve against an implied undertaking requires an applicant to demonstrate to the court on a balance of probabilities the existence of a public interest of greater weight than the values the implied undertaking is designed to protect, namely privacy and the efficient conduct of civil litigation….
As stated, the onus in each case will be on the applicant to demonstrate a superior public interest in disclosure, and the court will be mindful that an undertaking should only be set aside in exceptional circumstances. ...However, to repeat, an undertaking designed in part to encourage open and generous discovery by assuring parties being discovered of confidentiality will not achieve its objective if the confidentiality is seen by reluctant litigants too readily set aside.
…On such an application the court will be able to weigh against the examinee's privacy interest the seriousness of the offence alleged, the "evidence" or admissions said to be revealed in the discovery process, the use to which the applicant or police may put this material, whether there is evidence of malice or spite on the part of the applicant, and such other factors as appear to the court to be relevant to the exercise of its discretion. This will include recognition of the potential adverse effects if the protection of the implied undertaking is seen to be diluted or diminished.
Analysis
[22] In this case, the plaintiff alleges that it should be granted leave to appeal under both branches of the test for leave to appeal. I will address each branch of Rule 62.02(4) in turn.
The Test under Rule 62.02(4)(a)
[23] In this case, neither the Master nor the Motion Judge referred to the absence of any objection on the part of JitneyTrade to disclosure of the documentation produced by it in the plaintiff’s action that the plaintiff wishes to disclose to the police services and the Crown Attorney’s office in respect of the allegations of perjury against Pang. The plaintiff argues that, in such circumstances, the decision in Kitchenham v. AXA Insurance Canada, 2008 ONCA 877, [2008] O.J. No. 5413 holds that the interests of justice outweigh any resulting prejudice to JitneyTrade and, therefore, mandates relief against the deemed undertaking rule.
[24] The plaintiff says that it raised this issue before the Motion Judge, although not the Master. The Motion Judge did not address this issue in the Decision. It is therefore necessary to address the application of Kitchenham to the facts of this case in this Endorsement.
[25] The plaintiff relies on the following statements in Kitchenham at paragraphs 64 and 65, which it suggests are applicable in the present context:
The result of the balancing process required by subrule (8), and described by Binnie J. above, must be very different where the beneficiary of the protection afforded by the deemed undertaking has no interest in availing itself of that protection….
Where the interests of the party protected by the deemed undertaking would not be adversely affected by the use of the material, and assuming the material has relevance in the subsequent proceeding, the interest of justice would inevitably outweigh any resulting prejudice to the party who had disclosed the evidence. [italics added]
On this basis, the plaintiff argues that the decision of the Motion Judge is in conflict with the decision in Kitchenham.
[26] The circumstances in Kitchenham differ in an important respect from the present circumstances. In Kitchenham, the protected information was sought by a third party. In the present circumstances, the receiving party, the plaintiff, seeks to use the information. As is discussed further below, the present situation therefore raises significant concerns not present in Kitchenham pertaining to the plaintiff’s motivation. Accordingly, Kitchenham is not a conflicting decision for the purposes of Rule 62.02(4)(a). The plaintiff’s real objection with respect to that decision is that, in its opinion, the Master and the Motion Judge failed to apply the principle articulated therein correctly. This objection, as well as my further observations about Kitchenham, are addressed below.
[27] It is not clear from the plaintiff’s factum whether the plaintiff also takes the position that the decision of the Motion Judge conflicts with the decision of Hourigan J. (as he then was) in Bowman. The plaintiff suggests that the principle in Bowman is that relief from the deemed undertaking rule should be granted in respect of alleged perjury without any inquiry into the merits of the allegation, unless the court finds that the request is being sought for a collateral purpose that amounts to an abuse of process, rather than for a bona fide purpose. To the extent that the plaintiff argues that Bowman is also a conflicting decision for the purposes of Rule 62.02(4)(a), I do not agree.
[28] I think it is clear that the motion judge in Bowman was addressing the specific issues before him rather than proposing a different test or evidentiary threshold from those set out in Juman. Moreover, in Bowman, the issue before the court was whether the court was required to address whether the plaintiff would be successful in a criminal prosecution for perjury. Clearly, Juman does not require demonstration of evidence of perjury to such a standard. On the other hand, the motion judge in Bowman was not asked to address, and did not address, the application of Juman in circumstances where there was no support for an alleged claim of perjury whatsoever. Accordingly, I do not accept that Bowman stands for the principle asserted by the plaintiff.
[29] Further, to the extent that there is any conflict between Juman and Bowman, I agree with both the Master and the Motion Judge that Juman governs the present circumstances. Juman is clear that evidence of the presence or absence of an improper motive is only one factor to be considered in deciding whether to grant relief from the deemed undertaking rule and that, in order to assess whether an applicant has demonstrated a superior public interest in disclosure, a motion judge will need to have recourse to the documents or transcripts at issue.
[30] In any event, I am not persuaded that the plaintiff has demonstrated that the proposed appeal of the Order based on the existence of either of these alleged conflicting decisions involves any matter of such importance that leave to appeal should be granted. In this case, in the absence of any evidence that would permit an assessment of the factors referred to in paragraph 44 of Juman, there is no evidence that the matters at issue go beyond the interests of the parties to this litigation. Indeed, there is no evidence that would suggest that the plaintiff’s request is made for any purpose other than litigation strategy. Accordingly, given the absence of any factual basis before the Master regarding the alleged perjury, apart from bald allegations, there is no basis for concluding that the matter is of such importance that it is desirable that leave should be given.
[31] Based on the foregoing, the plaintiff cannot satisfy the test for leave to appeal in Rule 62.02(4)(a).
The Test under Rule 62.02(4)(b)
[32] I propose to address the plaintiff’s submissions under this branch of the test for leave to appeal in respect of JitneyTrade and Pang separately.
The Motion for Leave in Respect of JitneyTrade
[33] The plaintiff submits that the Motion Judge failed to apply the general principles set out in Juman and, accordingly, there is reason to doubt the correctness of the Order.
[34] I see no reason to doubt the correctness of the Order. The Motion Judge made it clear that he regarded evidence of the presence or absence of a bona fide motive as only one factor to be considered. It is also clear that the Master did not consider that the documentary evidence to be disclosed had to substantiate on its face a regulatory or a criminal law violation. On the other hand, for the same reasons as are discussed in greater detail in regard to the disclosure pertaining to Pang, the mere fact that the plaintiff wishes to make a complaint to regulatory authorities is insufficient to establish a matter of public interest of greater weight than the values that the deemed undertaking rule is designed to protect. In the absence of the documentary evidence that reveals or identifies the alleged regulatory offences, the Master could not conduct an adequate assessment of whether there existed such a public interest.
[35] In any event, the plaintiff has also failed to demonstrate that the proposed appeal involves matters of such importance that leave to appeal should be granted. In this case, there is no evidence that the matters at issue go beyond the interests of the parties to this litigation - that is, that the relief sought has any purpose beyond gaining some leverage in the litigation. The relief sought is specific to the particular circumstances. More importantly, as the Court does not know the specific regulatory offences that are alleged, I am not persuaded that the proposed appeal involves any question of general or public importance relevant to the development of the law and administration of justice.
[36] Accordingly, there is no basis for granting leave under Rule 62.02(4)(b) with respect to this aspect of the Order.
The Motion for Leave in Respect of Pang
[37] The plaintiff submits that the Motion Judge erred in two respects in denying relief in respect of the documentation produced by JitneyTrade that are alleged to demonstrate the plaintiff’s allegations of perjury. I will address these two grounds of appeal in turn. These grounds of appeal are based on the plaintiff’s view of the operation of the principles in Bowman and Kitchenham, respectively, in the circumstances of this case.
[38] First, the plaintiff says that the Motion Judge applied a test that requires satisfaction of the existence of the alleged perjury based on documentation provided before relief from the deemed undertaking rule could be granted. The plaintiff says that this standard is contrary to the applicable principle, which it suggests is set out in Bowman.
[39] I do not agree. Juman requires a court to assess, on a balance of probabilities, whether there exists a public interest of greater weight than the values that the deemed undertaking rule is designed to protect. I am not persuaded that the Motion Judge applied an incorrect test or standard with respect to the evidence regarding the perjury allegations.
[40] The Motion Judge agreed with the Master that the evidence was insufficient to support a conclusion that exceptional circumstances existed to justify relief from the deemed undertaking rule on two grounds. First, the Motion Judge agreed with the Master that the affidavit evidence of the plaintiff was inadmissible for the reasons stated above. The Motion Judge did not err in reaching that conclusion. Second, the Motion Judge also agreed with the Master that, even if the affidavit evidence were admitted, the plaintiff had failed to provide sufficient evidence of the alleged perjury to allow the Master to conduct an adequate assessment of whether there existed a public interest of greater weight than the values the implied undertaking is designed to protect. That is not the same as applying a standard requiring an actual demonstration of perjury. On this basis, the Motion Judge did not err in concluding that there were no exceptional circumstances before the Master to justify the requested relief. Nor am I persuaded that the Motion Judge erred in failing to apply the principle of Bowman as the plaintiff describes it. This has been addressed above.
[41] Second, as set out above, in reliance on the passages in Kitchenham set out therein, the plaintiff argues that the Master and the Motion Judge erred in denying relief from the deemed undertaking rule given the absence of any objection from JitneyTrade. The plaintiff argues that: (1) the public has an interest in preventing perjury; and (2) there is no resulting prejudice to the beneficiary of the deemed undertaking, being JitneyTrade, so that; (3) therefore, there is no basis for denying the requested disclosure. It says that the court has no “gatekeeper” function in these circumstances and, in particular, should not require evidence supporting the alleged perjury as part of its exercise of deciding whether to grant relief from the rule. In effect, the plaintiff says that, in such circumstances, absent evidence of an improper motive, the court should grant the requested relief from the deemed undertaking rule. The plaintiff argues that, therefore, the Master erred at law in denying disclosure on the basis of an absence of evidence that would allow an assessment of the alleged perjury as part of the review contemplated by paragraph 44 of Juman.
[42] As a preliminary matter, I note that there is little detailed information in the record before the Court regarding the particular documentation in relation to Pang that the plaintiff seeks to disclose to the police authorities and the Crown Attorney’s office. There is also little information regarding the circumstances under which JitneyTrade obtained such information. It is possible that such information ceased to be confidential when JitneyTrade received it. However, for the purposes of this proceeding, the plaintiff has proceeded on the basis that such documentation is subject to the deemed undertaking rule.
[43] This raises the question of the identity of the beneficiary of the deemed undertaking in the unusual circumstances of this case. Given the principles articulated by Doherty J.A. in Kitchenham, it would appear that JitneyTrade, rather than Pang, is the beneficiary of the deemed undertaking in respect of the productions made by it, although it is also possible that both JitneyTrade and Pang should be treated as beneficiaries if, indeed, the information remains confidential to Pang. Given the conclusion reached below, however, it is not necessary to reach a determination on this issue, and I have therefore proceeded on the basis that JitneyTrade alone is the beneficiary as the plaintiff suggests.
[44] I accept that the decision of Doherty J.A. in Kitchenham makes it clear that, in deciding whether or not to grant relief against the deemed undertaking rule, a relevant consideration would be whether the beneficiary of the rule is taking any position on the requested relief. However, the Court of Appeal did not suggest in Kitchenham that the principles in Juman did not apply in the circumstances in which a beneficiary did not object to the proposed use of documentation subject to the deemed undertaking rule.
[45] Moreover, in paragraph 65 of Kitchenham, the Court of Appeal made it clear that it is not just the absence of any adverse effect on the interests of the protected party that is relevant. A court must also consider the relevance of the disclosure in the subsequent proceeding, a consideration which engages the court’s concern for the perception of the fairness in the administration of justice.
[46] This conclusion is also reflected in the introductory language in paragraph 44 of Juman, which paragraph reads as follows in its entirety:
The chambers judge took the view that "leaving the discretionary power of exemption or variation with the courts is preferable to giving litigants the power to report to the police, without a court order, anything that might relate to a criminal offence (para.27). I agree. On such an application the court will be able to weigh against the examinee's privacy interest the seriousness of the offence alleged, the "evidence" or admissions said to be revealed in the discovery process, the use to which the applicant or police may put this material, whether there is evidence of malice or spite on the part of the applicant, and such other factors as appear to the court to be relevant to the exercise of its discretion. This will include recognition of the potential adverse effects if the protection of the implied undertaking is seen to be diluted or diminished.
[47] Moreover, in Juman at para. 24, Binnie J. identified the risk of abusing the discovery and production process for ulterior purposes:
… It is not uncommon for plaintiff's counsel aggressively to "sue everyone in sight" not with any realistic hope of recovery but to "get discovery". Thus, for the out-of-pocket cost of issuing a statement of claim or other process, the gate is swung open to investigate the private information and perhaps highly confidential documents of the examinee in pursuit of allegations that might in the end be found to be without any merit at all.
[48] For these reasons, the plaintiff is incorrect when it suggests that the court has no “gatekeeper” role in deciding whether or not to grant relief from the deemed undertaking rule in circumstances where the protected party does not object to the requested disclosure. The present circumstances provide a very good illustration of the need for such a role.
[49] There is no obvious explanation for the plaintiff’s interest in causing an investigation of its allegations of perjury at the present time, apart from a naked attempt to gain leverage over the defendant Pang in this litigation. If indeed these allegations are material to the plaintiff’s case, it will have the opportunity to establish the perjury in the trial of the actions. It will then be in a position to provide a decision of the court to the Crown Attorney’s office. However, prior to that time, the Court has a real concern for the administration of justice that can only be addressed by weighing the seriousness of the allegations; the evidence in support of the allegations; and the motivation of the plaintiff, among other considerations. In the absence of evidence regarding such allegations, the Master was not in a position to conduct such an exercise. Accordingly, the Master correctly concluded that the plaintiff had not established exceptional circumstances justifying relief from the deemed undertaking rule.
[50] Based on the foregoing, I am not persuaded that there is reason to doubt the correctness of the Order in respect of the requested disclosure of documentation pertaining to the alleged perjury of Pang.
[51] Further, given the absence of any documentary basis for assessing the alleged perjury, there is no basis on which the Court can find that this appeal involves matters of importance that go beyond the interests of the immediate parties and involves questions of general or public importance relevant to the development of the law and the administration of justice. In the present circumstances, in the absence of any means of assessing the alleged perjury and the other factors referred to in paragraph 44 of Juman, the record suggests that the plaintiff seeks relief from the deemed undertaking rule for the sole purpose of gaining leverage over the defendant in this litigation.
[52] Based on the foregoing, I conclude that the plaintiff has failed to satisfy the test for granting leave under Rule 62.02(4)(b).
Conclusion
[53] Based on the foregoing, leave to appeal the Order is denied in its entirety.
[54] With respect to costs, the plaintiff’s motion is substantively two separate motions having some commonality but also important differences. In these circumstances, the defendants are each entitled to their own costs on a partial indemnity basis. Accordingly, the plaintiff is to pay JitneyTrade costs in the amount of $4,500, on an all-inclusive basis, and to pay Pang costs in the amount of $3,200, also on an all-inclusive basis.
Wilton-Siegel J.
Released: December 4, 2015