SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: 9219-1568 Quebec Inc. (c.o.b. as MindGeek Canada), Froytal Services Ltd., Cygest Trading Limited, Webexpansion Cyprus Limited and MindGeek SARL, Applicants

AND:

Brandon Ramoutar, Richard Kurban, Cody Neale Schniderman, 8102040 Canada Ltd. and 8023212 Canada Inc., Respondents

BEFORE: D. M. Brown J.

COUNSEL:
T. Pratt, for the Applicants

R. Quance, for the Respondents, Cody Neale Schniderman and 8102040 Canada Ltd.

HEARD: March 26, 2014

REASONS FOR DECISION

I. Method to release computers seized under an Anton Piller order

[1] On February 28, 2014, Newbould J. granted an ex parte Anton Piller order which was executed on March 6, 2014 against the respondents, Cody Neale Schniderman and 8102040 Canada Ltd., at premises located at 18 Morley Road, Thornhill. The conduct of that search was described in the March 17, 2014 Report to the Court of the Independent Supervising Solicitor. As well, the Report identified the items – mainly computer hardware of various sorts and smartphones – which were removed from the Morley Road premises.

[2] The Anton Piller order has been extended, on consent, several times, but was set to expire on March 26, 2014. A dispute arose between the applicants and Schniderman about the method by which the computers seized from the Morley Road premises, which are now in the possession of the ISS, could be returned to him.

[3] The applicants alleged that Schniderman had misappropriated and misused their confidential information, including extensive customer email lists. A forensic search of the seized computers had revealed the presence of such confidential information on the computers’ hard-drives. The applicants wanted to delete any confidential information from the hard-drives before returning the computers to Schniderman. While Schniderman did not object to that condition of their return, he disagreed on how the deletion should be done.

[4] According to the applicants’ forensic information expert, Mr. Harold Burt-Gerrans of the firm H&A eDiscovery, the confidential information contained on the seized computers consists principally of customer lists and email addresses of the applicants’ customers. The lists often contain tens of thousands of email addresses. Some confidential customer information may be embedded in otherwise non-confidential information kept by Schniderman on the computer.

[5] While H&A could delete identified confidential information from the hard drives with some degree of certainty that it could not subsequently be retrieved or re-constructed, Burt-Gerrans deposed that if confidential information had been deleted from the hard drive prior to the seizure of the computers, H&A could not guarantee that following the return of the computers with their original hard drives such information could not be retrieved.

[6] As a result, the applicants proposed that the existing hard drives be removed from two computers – a Compaq laptop and a MacBook Pro - and replaced with new hard drives onto which H&A would copy non-confidential information from the original hard drives, and then the computers with the new hard drives would be returned to Schniderman. This process would take place against the backdrop that the ISS already possessed imaged copies of the hard drive of each seized computer containing both confidential and non-confidential information.

[7] Schniderman was content to permit the applicants to use good faith efforts to delete confidential information, and he was content with the proposed swap of the old hard drive with a new one for the Compaq, but not for his MacBook Pro. According to his counsel, Schniderman kept most of his business records on that computer and had installed certain applications which he did not want to lose. Also, Schniderman submitted that three weeks already had passed since the seizure of his computers and the applicants had had sufficient time to delete any confidential information.

[8] I am prepared to approve the deletion process proposed by the applicants and which was generally described in paragraphs 2, 3 and 4 of their draft order, but with certain changes:

(i) First, I am not prepared to permit the applicants to access the Evidence on the seized computers or replace hard drives without the assistance of forensic computer experts. To do so could result in the unnecessary deletion of non-confidential information, whether inadvertently or otherwise;

(ii) Second, I require the applicants’ forensic computer expert, whether H&A eDiscovery or some other firm, to serve and file with the Court, no later than April 18, 2014, a report describing how they conducted the deletion process and the results of the deletion process.

The hard drive replacement process can be used on both the Compaq and MacBook Pro computers, but in each case the applicants must ensure that the new hard drives contain proper copies of the computers’ original operating systems, together with proper copies of all applications found on the computers at the time of their seizure and non-confidential information.

[9] In their draft order the applicants proposed different completion dates for the deletion process on different computers or devices. I see no need to make that distinction. All deletion work must be completed by, and all seized computers and devices must be returned to Schniderman by, Friday, April 11, 2014. That is an outside return date. If the applicants and the ISS can return any computer or device to Schniderman before them, on a rolling basis, they should do so.

[10] As stated in my handwritten endorsement of yesterday, the terms of the March 10, 2014 Order as they relate to Schniderman and 8102040 Canada Ltd. shall continue in force until April 14, 2014.

[11] Finally, Mr. Burt-Gerrans reported that two new email accounts had been discovered which contained confidential information. The applicants sought, in paragraph 9 of their draft order, an order that Schniderman deliver up immediately to the applicants and the ISS the passwords to both those email accounts. Schniderman did not object to the order sought, but submitted that it should contain the language – “if he has them”. In my view the order should read as follows:

THIS COURT ORDERS that Cody Neale Schniderman deliver up immediately to the applicants and the ISS any and all passwords in his possession, power or control, or which are under his direction, to the accounts codys@trafficmail.com and codys@guerillatraffic.com and provide whatever assistance is necessary for those accounts to be secured by the ISS with the assistance of H&A.

[12] Counsel can submit a revised order for my signature. I have issued the order made on March 24, 2014 which can be picked up from my Registrar in Courtroom 8-6, 330 University Avenue.

D. M. Brown J.

Date: March 27, 2014