Court File and Parties

COURT FILE NO.: CV-17-569010 RELEASED: 2019/06/05 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Mann v. Sun Life Assurance Company of Canada and Sun Life Institutional Investments (Canada) Inc.

BEFORE: Master Graham HEARD: May 28, 2019

APPEARANCES: Matthew Sammon for the plaintiff Maureen Doherty for the defendants

Reasons for Decision

(Plaintiff’s motion to compel answers to undertakings and refusals and defendants’ motion for a confidentiality order)

[1] The plaintiff worked as the Head of Institutional Sales at Sun Life Institutional Investments (Canada) Inc. from March 17, 2015 until October 12, 2016 when his employment was terminated without costs. He now brings this action for damages for wrongful dismissal, psychological distress arising from workplace harassment, and bad faith conduct.

[2] The examinations for discovery of the defendants’ representatives were held on October 3 and 4, 2017. The plaintiff subsequently moved to compel answers to various undertakings and refusals. Prior to the hearing of the motion, the defendants agreed to answer all but one of the questions refused on the examinations for discovery of their representatives and the parties require a ruling on the propriety of the question. The plaintiff also takes issue with the adequacy of one of the defendants’ answers. The defendants also move for a confidentiality order applicable to various documents that they have agreed are relevant.

The refusals

[3] The question refused, from the examination for discovery of Carl Bang, the president of the defendant Sun Life Institutional Investments (Canada) Inc., was as follows:

Q. 813: And I want to know, since he [the plaintiff] has been terminated, has the company successfully brought in any other assets under administration?

[4] The term “assets under administration” refers to those assets held by the defendant for institutional investors. The previous question on Mr. Bang’s examination related to the portion of assets under administration for clients for which the plaintiff had an involvement in sales, and which might have generated commission income for the plaintiff.

[5] The question in dispute is with respect to “any other assets in administration”, and is therefore not limited to assets flowing from clients secured by the plaintiff. Assets that may have been held for institutional investors who placed those assets other than through the plaintiff cannot be relevant to the plaintiff’s claims. The question as framed is therefore too broad to be relevant. If the plaintiff wanted information about other assets placed by clients whose business he had secured, counsel should have asked other questions. It is not incumbent on the court to re-frame counsel’s question to make it sufficiently narrow to be relevant.

[6] In support of his position, the plaintiff also submits that the discovery plan agreed to by the parties contemplated production of various categories of documents, including:

“Documents reflecting new business the Plaintiff assisted in securing for the Defendants (or either of them), along with any calculations regarding the expected revenue to be earned by the Defendants or either of them with respect to those transactions, in particular with respect to the following clients: . . .”

[7] The plaintiff submits that the fact that the discovery plan contemplates production of documents reflecting new business from clients that he secured for the defendants makes relevant the oral discovery question about whether the defendants have brought in any other assets under administration that may or may not have been from the same clients subsequent to the plaintiff’s termination. However, the oral question relating to the bringing in of “ any other assets under administration” goes beyond the scope of the discovery plan requiring production of “documents reflecting new business the Plaintiff assisted in securing for the Defendants ”, and is therefore not made relevant by the discovery plan.

[8] For these reasons, the defendants’ refusal to answer question 813 on Mr. Bang’s examination is upheld.

[9] The plaintiff also disputes the adequacy of the response to a question from the examination of Stephen Peacher, the president of Sun Life Investment Management (who was examined for discovery on behalf of the defendant Sun Life Assurance Company of Canada), as follows:

Q. 64: To advise whether it is typical practice for Sun Life not to pay any commissions beyond the guaranteed commission for the previous year and not pay statutory minimum amounts owing.

[10] The defendants’ response provided on the day of the motion is “It is Sun Life’s practice to comply with the Employment Standards Act .” Given the allegation of bad faith in the manner in which the defendants terminated the plaintiff’s employment, the question of whether the plaintiff was treated other than in accordance with Sun Life’s “typical practice” is relevant. The answer given is not responsive to the direct question of what Sun Life’s typical practice was with respect to payment of commissions, and a responsive answer shall be provided, either prior to or at any further examinations of the Sun Life representatives.

Motion for a confidentiality order

[11] The parties agree that the law with respect to when a confidentiality order should be granted was established by the Supreme Court of Canada in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] S.C.J. No. 42. This decision, and the law on the issue, was thoroughly summarized by Strathy J. (as he then was) in Fairview Donut Inc. v. TDL Group Corp., 2010 ONSC 789, [2010] O.J. No. 502, paragraphs 34-39:

[34] The open court principle also governs applications, such as this, to seal portions of a court file. There is no doubt that the court has inherent jurisdiction, and jurisdiction under s. 137(2) of the Courts of Justice Act, to seal a portion of the court file:

137(2) A court may order that any document filed in a civil proceeding before it be treated as confidential, sealed and not form part of the public record.

[35] Even before Sierra Club, it was clearly established that a sealing order is an exceptional measure that violates the open court principle, a principle that should be curtailed only "where there is present the need to protect social values of superordinate importance": Nova Scotia (Attorney General) v. MacIntyre, [1982] 1 S.C.R. 175, [1982] S.C.J. No. 1, 132 D.L.R. (3d) 385, at pp. 186-87 S.C.R.

[36] In Sierra Club, at para. 53, the Supreme Court of Canada held that a sealing order will be granted where:

(a) such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; [the necessity stage of the test] and

(b) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings [the proportionality stage of the test].

[37] In that case, Justice Iacobucci stated, at para. 53, that three important elements are subsumed under the first branch of this test. First, the risk in question must be real and substantial, in that the risk is well-grounded in evidence and poses a serious threat to the commercial interest in question. As this case involves interests that are primarily commercial in nature, the words I have italicized bear emphasis -- the risk must be real, substantial and well-grounded in evidence, and disclosure must pose a serious threat to the interest in question.

[38] Second, Justice Iacobucci made it clear that a "commercial" interest must be an interest that goes beyond harm to the private commercial interests of a person or a business. In order to qualify as an "important commercial interest", the interest must be one that can be expressed in terms of a public interest in confidentiality. Justice Iacobucci stated, at para. 55:

In addition, the phrase "important commercial interest" is in need of some clarification. In order to qualify as an "important commercial interest", the interest in question cannot merely be specific to the party requesting the order; the interest must be one which can be expressed in terms of a public interest in confidentiality. For example, a private company could not argue simply that the existence of a particular contract should not be made public because to do so would cause the company to lose business, thus harming its commercial interests. However, if, as in this case, exposure of information would cause a breach of a confidentiality agreement, then the commercial interest affected can be characterized more broadly as the general commercial interest of preserving confidential information. Simply put, if there is no general principle at stake, there can be no "important commercial interest" for the purposes of this test. Or, in the words of Binnie J. in F.N. (Re), 2000 SCC 35, [2000] 1 S.C.R. 880, at para. 10, the open court rule only yields "where the public interest in confidentiality outweighs the public interest in openness". (Emphasis added)

[39] Third, the phrase "reasonable alternative measures" requires the judge to consider not only whether reasonable alternatives to a confidentiality order are available, but also to restrict the order as much as is reasonably possible while preserving the commercial interest in question.

[12] The defendants in this case seek a confidentiality order, which would restrict the plaintiff’s use of certain documents. The motion before Strathy J. in Fairview Donut was for a sealing order which would limit access to certain portions of a court file to the parties and the court. Although the relief sought in this case is for a different order than that considered in Fairview Donut, the parties did not dispute that the same test applies.

[13] The defendants seek the confidentiality order with respect to the following answers (referring to question numbers from examinations for discovery):

Qs. 210-213: Contractual documents which establish that the clients with whom Mr. Mann was involved in effecting sales were placed into open-ended funds. Qs. 220-221: To confirm the revenue Sun Life Institutional Investments earned in 2016 from clients investing in the five funds described by Mr. Bang. Q. 222: To provide information as to committed amounts and funded amounts of the investments made by the clients in 2016 with whom Mr. Mann was involved. Q. 297: To produce records maintained in the ordinary course of operations by Sun Life Institutional Investments regarding committed amounts and funded amounts from clients in 2016 through to the present time, particularly with respect to the clients with respect to whom the Plaintiff has advanced claims. Qs. 600-601: To advise for each of the specific clients with respect to which Mr. Mann is advancing a claim: 1) the date funds were committed; 2) the date amounts were funded; and 3) all fees and revenues earned by Sun Life Investments with respect to each of these clients. Q. 812: At the time of Mr Mann’s termination, to advise what portion of Assets Under Administration were with respect to the clients in which Mr. Mann had an involvement in sales. Q. 1362: To produce a copy of Carl Bang’s employment contract; can redact everything else beyond the compensation terms that would relate to incentive compensation.

[14] Based on Sierra Club and Fairview Donut, supra, the issues with respect to whether a confidentiality order should be granted are:

1. Whether the order sought is necessary to prevent a serious risk to the defendants’ commercial interest because reasonably alternative measures will not prevent the risk. Three factors to be considered in relation to this issue are: 1) whether the risk is real, substantial, and well-grounded in evidence; 2) whether the commercial interest relied upon by the defendants goes beyond their private commercial interest; and 3) whether reasonable alternatives to a confidentiality order are available, and what restrictions can be reasonably placed on the order while preserving the commercial interest in question;

2. And, whether the benefit sought by the defendants to their commercial interest outweighs the resulting limitation on the openness of the parties’ court proceeding.

[15] The first six of the seven answers in paragraph 13 above essentially relate to the amount and sources of business the plaintiff generated for the defendants while occupying the position from which he was terminated, which in turn relate to the plaintiff’s claim for unpaid commissions, and can be considered together.

[16] The first consideration in determining whether the requested confidentiality order is warranted is whether the commercial risk alleged by the defendants is “real, substantial, and well-grounded in evidence”. The defendants rely on the evidence in the supporting affidavit of Steven Lorenz, the chief financial officer of the defendant Sun Life Institutional Investments (Canada) Inc., sworn January 31, 2019, as follows:

• The questions related to Mann’s involvement in client accounts, including the amounts of funds clients have committed, and client-related revenues, are “commercially sensitive”, both to Sun Life and to the clients. (paragraph 19)
• Disclosure of the documents and information would harm the interests of Sun Life and its clients. (paragraph 20)
• First, a competitor could obtain an unfair competitive advantage by using the confidential information contained in the documents to solicit Sun Life’s clients, which would result in an economic loss to Sun Life. (paragraph 21)
• Second, if the information is made publicly available through this action, Sun Life will suffer irreparable harm to its reputation and goodwill and its relationships with the clients whose information is contained in these documents will be negatively impacted by the disclosure of confidential investment information. This harm to Sun Life’s client relationships will lead to financial losses. (paragraph 22)

[17] The plaintiff submits that the evidence of Mr. Lorenz is not sufficient to substantiate a real, substantial risk of harm to the defendants’ commercial interests. First, the plaintiff submits that the evidence of Mr. Lorenz is not reliable, and relies on the cross-examination of Mr. Lorenz, at which he acknowledged that he does not manage any of the Sun Life asset funds (Q. 31) and none of the individuals who sell or manage those funds report to him (Qs. 32 and 42). Further, in preparing his affidavit, Mr. Lorenz reviewed no documents (Q.72) and spoke with no Sun Life employees other than Sun Life’s senior counsel (Q. 57).

[18] The plaintiff also submits that the assertions in Mr. Lorenz’s affidavit are limited to bald, speculative allegations of harm that do not support the defendants’ contention that the required disclosure gives rise to a serious risk of commercial harm to the defendants.

[19] Finally, the plaintiff submits that the information that the defendants seek to protect on the basis that it is confidential client information, including “client accounts, the amounts of funds clients have committed, the client-related revenues, and related documents”, is already contained in documents filed with the court. Specifically, the defendants’ motion record filed in response to the plaintiff’s undertakings and refusals motion included a chart identifying the names of the clients who entered into investment contracts or subscription agreements, the amounts that each client agreed to invest, and Sun Life’s investment management fees associated with each client’s subscription agreement.

[20] I can accept that the information to be disclosed in the first six answers in paragraph 13 above (i.e. all answers except to Q. 1362) may be commercially sensitive and that Sun Life may have a concern about the confidentiality of its clients’ investment information. However, there can be no serious risk of harm resulting from disclosure of this information without a confidentiality order where Sun Life has already filed much of the information in a responding motion record that has been part of the public record since it was filed on February 6, 2019. Given this finding, it is not necessary to consider the other components of the test. No confidentiality order shall apply to these items.

[21] The remaining issue is whether a confidentiality order should be granted with respect to the production of Carl Bang’s employment contract, being the subject of Q. 1362. The evidence of Mr. Lorenz with respect to this agreement is:

• The information in that agreement is “confidential and commercially sensitive” and “its disclosure would detrimentally impact not only Sun Life’s business interests but also Mr. Bang’s privacy interests” (paragraph 16). In addition, disclosure of the information “raises a legitimate personal privacy concern for Mr. Bang, who has a reasonable expectation that information regarding his compensation will be kept confidential” (paragraph 18).
• Disclosure of Sun Life’s compensation structure could allow Sun Life’s competitors to gain an unfair competitive and strategic advantage which they could use to attempt to solicit executives and employees of Sun Life, or to unfairly compete with Sun Life in the investment industry (paragraph 17).

[22] The plaintiff submits, based on Sun Life’s notice of annual meeting dated March 19, 2018 and the attached Management Information Circular, that much of the information with respect to Sun Life’s executive compensation is already public. In this Circular, 46 of 102 pages address the issue of executive compensation. The compensation of various senior Sun Life executives, including Mr. Peacher, who was examined on behalf of Sun Life Assurance (see paragraph 9 above), is specifically disclosed on page 50. It is true that Mr. Bang, as president of the defendant Sun Life Institutional Investments (Canada) Inc., is not among the named individuals whose compensation is disclosed in the Circular. However, as acknowledged by Mr. Lorenz on his cross-examination (Qs. 160-165), the Circular contains a description of the “Sun Life Investment Management incentive plan”, which is applicable to individuals working for the defendant Sun Life Institutional Investments, including Mr. Bang.

[23] Counsel for Sun Life submits that Mr. Bang left Sun Life in April, 2018 and on that basis the Circular filed on the motion is of limited value. However, as indicated above, the notice of annual meeting was dated March 19, 2018, prior to his departure, and the Circular attached to it clearly addresses the 2017 compensation program, which includes the incentive plan. The fact that Sun Life’s executive compensation, including the incentive plan applicable to Mr. Bang, is contained in a public document, means that there could be no reasonable expectation on the part of Sun Life or Mr. Bang that the information would be confidential. Sun Life’s submission that a failure to grant a confidentiality order applicable to Mr. Bang’s employment contract would result in a significant risk of harm to its commercial interests, or in a violation of Mr. Bang’s privacy, is therefore untenable.

[24] For these reasons, the defendants’ motion for a confidentiality order is dismissed.

Costs

[25] At the conclusion of the hearing, both counsel filed costs outlines. If they cannot agree on the disposition of the costs of the motion, they may make written submissions, not exceeding three pages each, the plaintiff within 20 days and the defendants within 20 days following receipt of the plaintiff’s submission.

MASTER GRAHAM June 5, 2019