Court File and Parties

COURT FILE NO.: 15-64329 DATE: August 05, 2016 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Attorney General of Canada Applicant And The Canadian Broadcasting Corporation and Dean Beeby Respondents

BEFORE: Master Champagne

COUNSEL: J. Sanderson Graham, P. Tamara Sugunasiri and Mathew Johnson - Department of Justice, for the Applicant Colin Baxter for the Respondents

HEARD: June 14, 2016

Endorsement

[1] This motion arises from an application about the CBC’s right to keep and use confidential tax payer information, which CRA alleges it sent to the broadcaster by accident.

Background

[2] On November 24, 2014 the Canada Revenue Agency (CRA) sent a consultation package containing confidential taxpayer information to a CBC reporter by the name of Dean Beeby (“Beeby”). According to CRA, the package was intended for another government department and not for CBC. The package contained a CD with detailed information regarding the art donations of a number of Canadian taxpayers and businesses, and included names, addresses, and the value of tax credits that were granted with respect to those donations.

[3] The CRA Access to Information and Privacy (ATIP) directorate was advised of the error on November 25, 2014. Officials with the directorate immediately advised CBC of the mistake and made attempts to secure the return of the disclosure package. At 12:21 PM on November 25, 2014, CBC posted an article written by Beeby on its website concerning the disclosure of confidential taxpayer information. Some individual taxpayers were identified in that article. A number of follow-up stories ensued in the weeks thereafter.

[4] Since November 25, 2014, the CRA has made repeated requests to CBC to return the inadvertently disclosed taxpayer information. To date, CBC has not returned the confidential taxpayer information and on May 15, 2015, the CRA commenced an application seeking an order for the return of information as well as an order that the confidential information not be used in any future news reports. In support of their application, the applicant served three affidavits. One of the affiants was cross-examined and a number of undertakings to produce documents were refused.

[5] These refusals are the subject of this motion. The relevance of the documents requested is in issue.

[6] The issues are:

a. Do the undertakings requested exceed the scope of cross-examinations on affidavits? b. Are the documents relevant and should CRA comply with the undertaking requested?

[7] For reasons that follow, I am not prepared to compel CRA to produce any of the requested documents.

Evidence

[8] Anne-Marie Laurin deposes that she is the assistant director with the ATIP directorate of the CRA. She states that on November 25, 2014, she was advised by the supervisor of the clerical team that a mailing error resulted in a consultation package meant for another government department to be sent to Beeby, a journalist at CBC. Her evidence is that she took immediate steps to have the consultation package returned. She asked her staff to contact the CBC mailroom and Beeby to request the return of the package. Her evidence is that she and her staff made several attempts to contact Beeby in order to gain the return of the sensitive information that had been sent to him in error.

[9] At approximately 11:30 AM on November 25, 2014, Ms. Laurin called the ATIP coordinator at CBC and left him a message outlining the situation and asking if he could assist in retrieving the consultation package. He returned Ms. Laurin’s call at approximately 12:10 PM and advised that he would attempt to contact Beeby.

[10] At 12:30 PM Ms. Laurin was advised by one of her staff that CBC had just published an article concerning CRA’s disclosure of confidential taxpayer information. The article was written by Beeby and posted on the CBC website at 12:21 PM. That article and several others were attached to the affidavit of Ms. Laurin.

[11] It is uncontroverted that Beeby’s article titled “Canada Revenue Agency privacy breach leaks prominent Canadians tax details” states that the detailed information obtained by CBC was through a major privacy breach by CRA. The updated article, which was released on November 26, 2014, at 12:11 AM, states that the “unredacted list delivered to CBC in digital format, was an erroneous response to a request for unrelated records under the Access to Information Act. On the evening of November 24, 2014, on the evening news program “The National” Terry Milewski, senior correspondent with the CBC advised that somehow CRA had “hit the wrong button and sent the CBC a detailed list of wealthy Canadians who claim big tax deductions for donating art”. On the evening of November 26, 2014, at 6:40 PM (updated at 1:51 AM), Beeby published another article on the breach titled “Revenue Canada privacy breach concerns artists, writers”, in which he stated “a digital spreadsheet the agency erroneously sent to CBC this week includes the names of several hundred mostly prominent Canadians…”.

[12] In an interview with Evan Solomon, Beeby said the following:

“once they realized something bad had happened, that was this morning, they attempted to retrieve it. I got a lot of phone calls and emails and a lot of phone calls from people who weren’t from CRA but were contacted by them. Our mailroom got a call to see if it was still there and they could somehow retrieve it. A lot of pressure, I can understand their concern.”…“I don’t think it was somebody with malice who sent this to us. I think it was an accident. I think somebody hit the wrong button and the wrong information got onto the CD and the rest is history.”

[13] On December 22, 2014, at 9:14 AM, Rob Russo (“Russo”), Ottawa bureau chief for CBC, wrote an article titled “How to expose a privacy breach – responsibly”. In his article he indicated that the envelope that had been sent to Beeby had been sent inadvertently and its contents made it clear why CRA wanted it back.

[14] Russo swore an affidavit in response to CRA’s application. In that affidavit he defends CBC’s retention of the CD containing the sensitive information and at no point does he allege that the breach was advertent. In fact, in cross-examination on his affidavit he states that the information was sent to CBC in error.

[15] In his affidavit, Russo refers to the publication of stories regarding the breach in question as well as other breaches by CRA. He defends Beeby’s handling of the matter saying Beeby abided by CBC’s “Journalistic Standards and Practices”. He also outlines the communication between CRA and CBC with respect to CRA’s attempt to gain the return of the confidential information both at the time the breach occurred and afterward. He defends the CBCs retention of it. His affidavit also discusses the fact that a complaint against the CBC, which was filed with the Privacy Commissioner, was dismissed, concluding that CBC hadn’t breached the Privacy Act in their stories on the breach. He attaches to his affidavit, the report of the Privacy Commissioner which is entirely favourable to CBC. It is worth noting that in that report, the Privacy Commissioner states that in its response to the complaint, CBC acknowledged that the confidential information had been sent to its reporter in error.

Analysis

[16] The fact that this proceeding was initiated by way of application and not by way of statement of claim is significant in deciding this motion.

[17] CBC is not entitled to the broad document production to which it would be entitled in an examination for discovery. Since this proceeding was initiated by way of application, the affiant is a fact witness and not a representative of the applicant. This entitles the respondent to cross-examine the witness on her affidavit, but does not entitle the respondent to demand undertakings to the same extent as in the case of examinations for discovery. The scope of cross examination of a deponent on an application is well set out in R. v. Rothmans [1], which I will turn to later in this decision.

[18] CBC submits that the court should not shield CRA from documentary production because of CRA’s decision to proceed by way of application rather than by way of action. My review of the application material and CBC’s response leads me to conclude that the facts are not in dispute and that this matter was properly commenced by way of application. CBC could have asked to have this application proceed as a trial and it chose not to do so. It cannot now ask the court to treat the cross examination of the CRA’s affiant like an examination for discovery.

[19] The refusals that are at issue in this motion are refusals to produce the following:

a. the investigation report conducted by security and internal affairs at CRA. b. any documents relating to the breach of security that may have assessed the effects of the breach and the harm of the breach. c. a copy of material allegedly sent to the Privacy Commissioner. d. policies and procedures for addressing all security incidents including breaches of information. e. all notes and records of the people involved in the security breach that were prepared whether for security and internal affairs review or at the request of Ms. Laurin or Mr. Henderson. f. the brief prepared by Ms. Laurin for senior management with respect to the breach.

[20] The CBC maintains that I must take into consideration the applicable test relating to publications bans in coming to my decision on this motion. That test is found in Dagenais/Mentuck (Dagenais v. Canadian Broadcasting Corp. [2]; R. v. Mentuck [3]). In Dagenais at paragraph 73, the Supreme Court held that a publication ban should only be ordered where:

“ (a) such a ban is necessary in order to prevent a real and substantial risk to the fairness of the trial, because reasonably available alternative measures will not prevent the risk; and (b) the salutary effects of the publication ban outweigh the deleterious effects to the free expression of those affected by the ban”.

The CBC contends that CRA’s inadvertence and diligence upon learning of the privacy breach is relevant to the application of this test which it will argue on the application.

[21] The CRA’s position is that the Dagenais/Mentuck test is not appropriate in the circumstances of this case as its application turns on the doctrine of breach of confidence, the elements of which are:

i. The information was confidential; ii. the information was communicated in confidence; and iii. the information must have been misused by the party to whom it was communicated in confidence to the detriment of the party who communicated it.

It also relies on the torts of detinue and unjust enrichment to support its application.

[22] It is not necessary or appropriate for me to determine the proper test on the application at this juncture. That will be up to the judge hearing the application. I will consider elements of both tests in rendering my decision.

[23] In coming to my decision on this motion, I am guided by Rothmans at paragraph 143, where Perell J. summarizes the case law on the scope of cross-examinations on an affidavit. Rothmans and the accompanying case law make it clear that the scope of a cross-examination on an affidavit is much narrower than, and is not a substitute for, an examination for discovery. [4] Questions on a cross-examination must be relevant to the issues on a particular application or motion, relevant to the matters raised in an affidavit by a deponent, or relevant to the credibility and reliability of a deponent. [5] Questions that are overbroad or speculative, colloquially known as a “fishing expedition”, are not permitted in examinations for discovery (Cominco v. Westinghouse Can. Ltd. [6]; Allarco Broadcasting Ltd. V. Duke [7]) and would not be permissible on cross-examination given its much narrower scope.

[24] On the material before me, I need not deal with whether or not the answers to the refusals go to the issue of the deponent’s credibility. There is no evidence to suggest that Ms. Laurin is not credible or reliable. I will deal only with whether the requested answers are relevant to the matters raised in the affidavit or the application.

[25] CBC argues that the documents it requests to be produced in answer to requests for undertakings are relevant to:

a. The inadvertence of the disclosure, b. CRA’s diligence in preventing or containing the breach of disclosure, and c. The harm caused by the breach.

[26] CBC explains that the issue of inadvertence is important because if the leak was purposeful, it would come from a “source” and that would be an important factor for its defence of the application in September. There is no evidence by either party suggesting that the breach was anything other than inadvertent. The CBC’s own evidence is replete with references to the fact that the breach was inadvertent. I find that the CBC’s request for documents in this respect is no more than a fishing expedition and I am not prepared to compel CRA to produce any documents in this regard.

[27] CBC argues that the issue of the diligence of CRA goes to whether or not CRA has clean hands in seeking equitable relief in the form of an injunction. The doctrine of clean hands would prevent an applicant who engages in improper conduct or wrongdoing from benefitting from that misconduct or wrongdoing. In considering the equitable doctrine of “clean hands”, I consider the words of Perell J. in Sherwood Dash Inc. v. Woodview Products Inc. [8] at paragraphs 51 and 52, where he states that “Judges of the courts of equity do not deny relief because a claimant is a villain or a wrongdoer; rather, the judges deny relief when the claimant’s wrongdoing taints the appropriateness of the remedy being sought by the court”. He quotes Ungoed-Thomas J. in Argyll v. Argyll that, in considering if a claimant has clean hands, “the cleanliness required is to be judged in relation to the relief sought”. I conclude on the evidence before me that, while CRA most certainly made a mistake, that mistake does not amount to misconduct or wrongdoing. Even if it did, I find that there is no connection between the conduct and the relief sought by CRA. Taking into consideration this finding and the elements of the test for relevance summarized in Rothmans, I do not find the requested documents relevant.

[28] CBC submits that CRA must prove there is a risk of harm necessitating a publication ban in order to be successful on its application. CBC seeks production of the CRA’s documentary evidence with respect to that harm. CRA does not allege harm to individual taxpayers in its application or in the evidence in support of the application. Its application is based on the doctrine of breach of confidence. It intends to argue systemic harm, not individual harm. In light of this, in my view, the documents sought by CBC are not relevant. On the hearing of the application, CBC can point to the lack of evidence of harm and rely on the onus on CRA to meet all of the requirements for an injunction. I am therefore not prepared to compel the production of documents in this respect.

[29] Finally, dealing with CBC’s request for the material sent to the Privacy Commissioner, I conclude that the report of the Privacy Commission is relevant to whether or not the CBC misused the confidential information, which is an element of the doctrine of breach of confidence. The report is attached as an exhibit to Russo’s affidavit. As it is entirely favourable to the CBC, I do not see that the source documents are relevant to its defence of the application and I am not prepared to compel CRA to produce them if they have them.

[30] Accordingly, CRA need not comply with any of the undertakings it refused.

[31] If the parties are unable to agree on costs, they may provide me with written submissions within 30 days.

Master Nathalie Champagne DATE: August 5, 2016

Footnotes

[1] 2011 ONSC 2504. [2], [1994] 3 S.C.R. 835. [3] 2001 SCC 76, [2001] 3 S.C.R. 442. [4] See BOT Construction (Ontario) Ltd. v. Dumoulin, (2007) CarswellOnt 7636 at para. 6. [5] See Superior Discount Limited v. N.Perlmutter & Company; Superior Finance Company v. N. Perlmutter & Company, [1951] O.W.N. 897. [6] (Cominco v. Westinghouse Can. Ltd. (1979), 11 B.C.L.R. 142 (C.A.)). [7] Allarco Broadcasting Ltd. V. Duke (1981), 26 C.P.C. 13 (B.C.S.C.). [8].