CITATION: Court Canada Ltd. v. Ontario, 2017 ONSC 6270
COURT FILE NO.: CV-10-406401
DATE: 20171020
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Court Canada Ltd., Plaintiff
AND:
Her Majesty the Queen in Right of the Province of Ontario, represented by the Attorney General for the Province of Ontario, Chris Walpole and Lou Bartucci, Defendants
BEFORE: Penny J.
COUNSEL: Antonin I. Pribetic and Tamar Friedman, for the moving defendants
Matthew Gottlieb and Fahad Siddiqui, for the responding plaintiff
HEARD: October 19, 2017
ENDORSEMENT
Overview
[1] In a brief handwritten endorsement of October 19, 2017, I dismissed the principal relief sought by the moving party on this motion but allowed certain ancillary relief, all with reasons to follow. These are those reasons.
[2] The defendant’s motion seeks a stay of the plaintiff’s action or, in the alternative, an order removing plaintiff’s counsel, Mr. Sachdeva, as counsel of record.
[3] The basis for this relief is said to be a violation of Ontario’s confidentiality rights – specifically, its right to the protection of solicitor client and attorney work product privilege. Ontario argues that the plaintiff, and its counsel, have taken improper advantage, and made improper use, of privileged documents which were inadvertently disclosed to the plaintiff as part of Ontario’s document production in 2010.
Background
[4] In this action, the plaintiff sues for breach of contract, negligent misrepresentation and deceit, seeking damages of over $12 million. The crux of the action is the allegation that the plaintiff’s contract with the province permitted it to expand certain information technology services throughout Toronto, with the possibility of expansion province-wide. The province breached the contract by pulling the plug on the information technology project. Ontario claims that it was simply exercising discretionary rights under the contract not to expand the information technology services. The trial is scheduled to proceed in January for an estimated 40 days.
[5] In December 2010, Ontario inadvertently listed in Schedule A of its list of documents over 100 documents which were subject to solicitor client and/or litigation privilege. All these documents were produced to the plaintiff in January 2011.
[6] In May 2011, Ontario realized that two of the documents it had produced were privileged. The plaintiff agreed to remove and destroy the two documents over which the privilege claim had been made.
[7] In February 2012, Ontario then asserted that it had inadvertently produced over 100 privileged documents and demanded that its entire original production be destroyed.
[8] Once again, the plaintiff agreed to destroy all of the original documents. The evidence is that the plaintiff delete all electronic file folders containing the original documents and confirmed that it no longer had paper copies of the original documents. It also searched email accounts for electronic copies of the original productions and, as far as the principal, Greg Azeff, was aware, deleted them all.
[9] Similarly, Mr. Sachdeva, who had just been retained, isolated the original productions and proceeded to destroy electronic copies of which he was aware and all hard copies.
[10] Subsequently, two incidents occurred in the course of this litigation which raised the defendant’s suspicions and, ultimately, gave rise to this motion.
[11] The first incident arose from the plaintiff’s written answers to undertakings given on its discovery. In March 2015 the plaintiff provided its response to two omnibus questions asking for any other evidence relied upon to support certain claims. The plaintiff’s answer included a reference to an email exchange between a provincial employee and a lawyer with the Crown law office civil, which is counsel to the province in this matter. That document had been on the list of inadvertently produced documents over which a claim of privilege was asserted in 2012.
[12] On subsequent inquiry, the plaintiff advised that it had taken this reference, not from the document, but from a summary Azeff prepared of the original productions pre-February 2012; that is, before the province advised that it had inadvertently produced privileged documents in its original productions. Azeff and Sachdeva say they did not make the connection to a privileged document when drafting/reviewing this answer to undertaking.
[13] There were subsequent discussions about the destruction of this summary which were not finally resolved, although the plaintiff gave an interim undertaking that no further use would be made of this document.
[14] The second incident arose after delivery of a report prepared by the plaintiff’s expert on damages, Paul Mandel. In follow up questioning on the report, Ontario asked for production of all communications between the plaintiff and its expert. Part of that production included an email to the expert forwarding a number of other emails and attachments. One of those attachments was the same email referred to the in the answers to undertakings.
[15] At that point, Ontario concluded that the plaintiff and its counsel had not been forthright, were making repeated, improper use of privileged documents which they represented had been destroyed, and brought this motion.
[16] In an affidavit responding to the defendant’s motion, Azeff deposed that one of the things he forwarded to the damages expert was a message, with a number of attachments, which he found in his Sent Mail. That message had been sent much earlier to a different damages expert who had been on retainer. Azeff testified he was unaware that the offending email was one of the attachments to the old email he forwarded to Mandel.
[17] The damages expert also filed an affidavit. He deposed that: the offending email had nothing to do with damages; he probably did not look at it in preparing his report at all; it was not listed as one of the things he consulted or had reference to in preparing his damages report; and, he certainly had no memory whatsoever of looking at the email attachment prior to this motion.
Analysis
[18] There is no doubt that solicitor client privilege is of paramount significance as a rule of substantive law. Solicitor client privilege must be as close to absolute as possible to ensure public confidence and to retain relevance. Parties must be left to prepare their contending positions in private, without adversarial influence and without fear premature disclosure. However, as the courts have often said, mistakes happen.
[19] A stay of judicial proceedings is only, and should only be, available in the clearest of cases. This involves situations where there is a violation of a fundamental right that is central to the functioning of our judicial system. In the present context, the remedy of a stay is reserved for circumstances where solicitor client privilege has been deliberately breached or a party or its lawyer has acted in flagrant or reckless disregard of confidentiality rights. A stay is only appropriate where the party’s conduct has tainted the case to such degree as to be manifestly unfair to the other party to the litigation or has brought the administration of justice into disrepute by impairing the adjudicative function of the courts and undermining public confidence in the legal process.
[20] Ontario submits that the plaintiff’s claims of inadvertence are suspect when contrasted with the preponderance of the evidence and probabilities. It submits that there have been repeated and intentional breaches of its privilege and that the integrity of the administration of justice has been prejudiced. Permitting the action to continue would bring the administration of justice into disrepute.
[21] I am unable to agree with this submission. There are thousands of documents in this case. The plaintiff’s evidence is that it made good faith efforts to destroy all copies of the original productions and that the two alleged subsequent “uses” of one of those documents was inadvertent. This evidence is not contradicted and is plausible in the circumstances, supported by contemporaneous documents. I find the plaintiff has not “used” the challenged document in the manner necessary to constitute an intentional or reckless breach of the defendant’s privilege.
[22] It may well be the case, as argued by the defendant, that the plaintiff considers the privileged document in question to be “damning” to the defendant’s case. However, the plaintiff’s discovery of this document was as a result of Ontario’s inadvertence, and did not result from anything done by the plaintiff. If the document is privileged, it cannot be used in evidence against the defendant in any circumstances, absent waiver which is not alleged here. It matters not how “important” or how “damning” the document may be. It was produced through inadvertence and can not be used against the defendant or admitted into evidence. The plaintiff’s subjective beliefs are simply irrelevant to this question.
[23] The defendant’s position results in an inconsistency – the defendant is entitled to justify its mistake as arising from inadvertence but the plaintiff is not. I find, on the evidence, that the plaintiff’s failure to destroy the one electronic copy of the one offending document buried as an attachment to an omnibus email in a “Sent Mail” folder, and the subsequent “use” of the offending document was inadvertent.
[24] In addition, the two uses to which this document has been put have not resulted in any prejudice to the defendant. The answers to undertakings have gone only to the defendants and, in their present form, shall not be disclosed to anyone else or form any part of the record before the trier of fact. To ensure this is so, those answers must be amended and any information referring to the content of any privileged communication must be excised.
[25] The offending email inadvertently sent to the damages expert is relevant, if at all, only to liability, not damages. The uncontradicted evidence is that the expert did not rely upon it and indeed cannot remember even looking at it.
[26] These uses are not “uses” which could fairly be described as a deliberate breach of Ontario’s privilege or actions in flagrant or reckless disregard of Ontario’s confidentiality rights. Nor have these uses resulted in any prejudice to the defendant. They are not uses which warrant the extraordinary remedy of a stay of the plaintiff’s proceeding on the eve of trial.
[27] Similarly, in order for plaintiff’s counsel to be disqualified, it must be shown, among other things, that there is a risk that the confidential information will be used to the prejudice of the disclosing party. It must also be shown that removal from the record is an appropriate remedy in the circumstances.
[28] Although prejudice is presumed where the disclosure of confidential information is involved, I am satisfied on the evidence before me on this motion that the presumption has been rebutted. The initial disclosure resulted from the inadvertence of Ontario, not through any conduct of the plaintiff or its counsel. The subsequent “use” of one of the privileged documents in the two circumstances described above did not involve an intentional breach of Ontario’s privilege by Sachdeva and, even if it did, did not result in any prejudice, given the limited nature of the “use” involved. I do not think Sachdeva’s conduct fell below an acceptable standard. The remedy of removal of counsel of record is not appropriate in the circumstances.
[29] Having said all this, further inadvertent leaks of this information must stop. The plaintiff must re-double its efforts to ensure that all inadvertently produced documents over which Ontario has made a claim of privilege are destroyed or returned and that no further use of any kind be permitted to occur. To that end, the two answers to undertakings which refer to the privileged email must be amended to excise that information. As well, the alternative relief sought in paragraphs 3(b), (c), (d) and (f) of the defendant’s notice of motion are granted. Thus, there shall also be an order:
directing the plaintiff to destroy any privileged Ontario documents and records in its possession, power or control and to provide attestation to the defendants and the court;
directing the plaintiff and its principal, Greg Azeff, to destroy any work product created from privileged Ontario documents and records and to provide attestation to the defendants and the court;
a) directing the plaintiff’s expert, Paul Mandel of Collins Barrow, to return any privileged Ontario documents and records in his possession and provide attestation to the defendants and the court, and b) prohibiting Mandel from referring to or relying on any of the contents of those documents and records in these proceedings, including at trial; and
prohibiting the plaintiff, or any witness called on behalf of the plaintiff, from referring to the contents of privileged Ontario materials during the course of this action, including at trial.
Costs
[30] The principal relief sought on this motion was not granted, although some important relief was granted. There was, accordingly, mixed success. In addition, the conduct of both parties contributed to the events giving rise to this motion. For these reasons, the appropriate disposition of costs is to fix the costs of this motion in the amount of $45,000 (inclusive of all fees, disbursements and applicable taxes) payable in the cause.
Penny J.
Date: October 20, 2017