SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
RE: Stikeman Elliott LLP, Plaintiff/Moving Party
AND:
Myron I. Gottlieb, Defendant/Respondent
BEFORE: L. A. Pattillo J.
COUNSEL: Mark Dunn and Carlie Fox, for the Plaintiff/Moving Party
Myron I. Gottlieb, in Person
Norm Emblem, for the Affected Party
HEARD: May 2, 2019
ENDORSEMENT
Introduction
1This is a motion by the Plaintiff, Stikeman Elliot LLP (“Stikeman”), for an order pursuant to s. 135(2) and (3) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) excluding the public from the trial of this action, scheduled to commence before me on May 13, 2019, and prohibiting any person from disclosing any information relating to the action.
2The Defendant, Myron I. Gottlieb, opposes Stikeman’s motion on the basis that the relief sought by Stikeman seriously infringes the principle that court proceedings should be open.
3Stikeman’s motion is supported by the Affected Party.
4In light of the nature of the relief requested on this motion, Stikeman followed the Court’s Consolidated Practice Direction concerning Publication Bans as set out in Part V, Section F and sent a Notice of Request for Publication Ban on April 23, 2019. I am advised that one media party responded and received the redacted motion material but decided not to participate in the motion.
5Stikeman’s action (the “Action”) seeks a permanent injunction against Mr. Gottlieb preventing him from making written or oral statements that harm, disparage or adversely affect Stikeman’s reputation and, more particularly, from acting upon or engaging in any of the activities and initiatives set out in a letter dated August 18, 2015 and attachments that Mr. Gottlieb sent to Stikeman (the “Letter”). Stikeman alleges that Mr. Gottlieb’s allegations in the Letter are false and defamatory and, if published, will cause it and certain of its partners named in the Letter, significant reputational harm.
6A brief background is necessary.
Background
7In 1998, Livent discovered accounting irregularities and engaged Stikeman and others to undertake a joint internal investigation of Livent’s accounting practices and disclosures. Mr. Gottlieb takes exception to the activities of Stikeman and some of its partners during that investigation and subsequently as they relate to him.
8Mr. Gottlieb was suspended from his position at Livent effective August 10, 1998. He was subsequently charged criminally along with Mr. Garth Drabinsky with both fraud and forgery relating to the books and records of Livent.
9In September 2006, Mr. Gottlieb commenced an action in the Ontario Supreme Court against numerous parties including Stikeman and the Stikeman partners and employees involved in the 1998 investigation and subsequent events. The 2006 action was in essence for damages based on malicious prosecution. The claim pleaded against the Stikeman parties included conspiracy to manipulate and alter documents and information to destroy Mr. Gottlieb’s reputation based on their involvement in the 1998 investigation and following.
10In 2007, the 2006 action was dismissed as being premature as the criminal charges were still pending.
11In 2009, Mr. Gottlieb and Mr. Drabinsky were each convicted of two counts of fraud and one count of forgery. They were each sentenced to jail terms, Mr. Gottlieb to six years in total. The conviction was upheld on appeal although Mr. Gottlieb’s jail term was reduced to four years in total.
12On December 23, 2013, the Affected Party obtained an ex parte injunction against Mr. Gottlieb preventing him from disseminating the contents of his draft letter. The injunction was subsequently continued until trial. The court file was sealed.
13The Action was commenced in September 2015, following Stikeman’s receipt of the Letter. In the Letter, Mr. Gottlieb advised that he had drafted a letter to Stikeman clients and other entities setting out details of the alleged misconduct by Stikeman and one or more of its partners concerning the 1998 investigation and subsequent events. Attached to the Letter was a list of more than a thousand proposed recipients.
14As a result of the Letter, Stikeman sought and obtained an ex parte injunction from Newbould J. on September 11, 2015 enjoining Mr. Gottlieb from disseminating to Stikeman clients’ material which states that Stikeman engaged in fraudulent conduct in its dealings with Livent and Mr. Gottlieb. The September 11, 2015 Order further provided that “any document filed in these proceedings shall be treated as confidential, shall be filed in a sealed envelope, and shall not form part of the public record ... and shall continue after the final disposition of these proceedings, subject to any further order of the Court.”
15On October 5, 2015, following a hearing with Mr. Gottlieb present, Newbould J. continued the ex parte injunction until trial. In his endorsement dated October 7, 2015, Newbould J. found there was a serious issue to be tried because (among other things):
a) The Letter was “clearly defamatory” of, and intended to harm Stikeman;
b) There was “no evidence whatsoever” that the Letter could be justified;
c) Mr. Gottlieb harboured ill will and malice towards Stikeman;
d) Mr. Gottlieb “intends to harm Stikeman” by publishing the Letter; and
e) Publication of the Letter would cause damage that in all likelihood would be irreparable and not quantifiable in monetary terms.
16The trial of the Affected Party’s action was held in camera pursuant to a ruling made by Penny J. dated February 12, 2016 (the “Penny Decision”). All of the documents in the trial, including the Penny Decision and the trial decision, were sealed.
The Issues
17The issues on this motion are:
Whether the trial of the Action should be held in camera, pursuant to s. 135(2) of the CJA;
Whether the interim sealing order of Newbould J. dated September 11, 2015, should continue through to the end of the trial; and
Whether any relief should be provided in order to protect the interests of the Affected Party.
Position of the Parties
i. Stikeman
18Stikeman’s principal submission is that the trial should be held in camera to protect its right to a fair trial and the efficacy of the administration of justice. It submits that an open trial will defeat the remedy it seeks in the Action by enabling publication of Mr. Gottlieb’s allegations which it seeks to prevent by the Action. As a result, Mr. Gottlieb will accomplish his intended result – public accountability through publication of his allegations. Even if Mr. Gottlieb loses the trial, he will have been successful in achieving his goal.
19Stikeman submits that as there are no reasonably available less restrictive measures to an in camera hearing, a closed court is necessary to preserve the integrity of the judicial process and the proper administration of justice.
20Stikeman further submits that a sealed court is necessary to prevent disclosure of facts and the trial decision of Penny J. which were sealed in the Affected Party’s action and which Stikeman intends to rely on at trial.
21In support of its position, Stikeman relies on the Penny Decision. Stikeman submits that the facts upon which that decision is based are substantially identical to those before the court in this motion.
ii. Mr. Gottlieb
22Mr. Gottlieb submits that Stikeman has failed to meet the heavy burden to substantiate that the trial should be conducted in camera. It has provided no evidence that there is a serious risk to an important interest that must be protected by an in camera trial or the continuation of the sealing order. Rather, Stikeman’s sole interest in having the trial in camera is to prevent potential harm to its reputation.
23With respect to the publication of his allegations against Stikeman, Mr. Gottlieb submits, as he put it in argument, “the cat’s already out of the bag”. He submits that his 2006 action against, among others, Stikeman and its partners, raised the same allegations that are contained in the Letter. That action and its allegations were in the public domain. In addition, shortly after the 2006 action was commenced, the Globe and Mail published a front-page article in its Report on Business on Saturday October 7, 2006 titled “Gottlieb emerges to blame law firm for misfortunes”, which specifically dealt with Mr. Gottlieb’s claims against Stikeman and certain of its partners.
iii. The Affected Party
24As noted, the Affected Party supports Stikeman’s motion. It submits that any order made by the court concerning the trial of the Action should not interfere with the sealing order made in its action.
Open Courts
25Section 135 (1) of the CJA provides that, subject to subsection (2), all court hearings shall be open to the public. Section 135(2) provides:
The court may order the public to be excluded from a hearing where the possibility of serious harm or injustice to any person justifies a departure from the general principle that court hearings should be open to the public.
26The principle of open courts is inextricably tied to the rights guaranteed by s. 2(b) of the Canadian Charter of Rights and Freedoms: Canadian Broadcasting Corporation v. New Brunswick (Attorney General), 1996 CanLII 184 (SCC), [1996] 3 S.C.R. 480 at para. 23. Section 2(b) provides:
- Everyone has the following fundamental freedoms:
(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;
27The open court principle requires that court proceedings presumptively be open and accessible to the public and the media: A.B. v. Bragg Communications Inc., [2012] 2 S.C.R. 567, 2012 SCC 46 at para. 11.
28A party seeking to deny public access to and publicity of court proceedings must satisfy the test set out in Dagenais v. Canadian Broadcasting Corp., 1994 CanLII 39 (SCC), [1994] 3 S.C.R. 835 and R. v. Mentuck, 2001 SCC 76, [2001] 3 S.C.R. 442 (the “Dagenais/Mentuck test”), which is described by the Supreme Court of Canada in Toronto Star Newspapers Ltd. v. Ontario, [2005] 2 S.C.R. 188, 2005 SCC 41 at paras. 26 – 28 as:
26 The Dagenais test was reaffirmed but somewhat reformulated in Mentuck, where the Crown sought a ban on publication of the names and identities of undercover officers and on the investigative techniques they had used. The Court held in that case that discretionary action to limit freedom of expression in relation to judicial proceedings encompasses a broad variety of interests and that a publication ban should only be ordered when:
(a) such an order is necessary in order to prevent a serious risk to the proper administration of justice because reasonably alternative measures will not prevent the risk; and
(b) the salutary effects of the publication ban outweigh the deleterious effects on the rights and interests of the parties and the public, including the effects on the right to free expression, the right of the accused to a fair and public trial, and the efficacy of the administration of justice. [para. 32]
27 Iacobucci J., writing for the Court, noted that the "risk" in the first prong of the analysis must be real, substantial, and well grounded in the evidence: "it is a serious danger sought to be avoided that is required, not a substantial benefit or advantage to the administration of justice sought to be obtained" (para. 34).
28 The Dagenais/Mentuck test, as it has since come to be known, has been applied to the exercise of discretion to limit freedom of expression and of the press in a variety of legal settings. And this Court has recently held that the test applies to all discretionary actions which have that limiting effect:
While the test was developed in the context of publication bans, it is equally applicable to all discretionary actions by a trial judge to limit freedom of expression by the press during judicial proceedings. Discretion must be exercised in accordance with the Charter, whether it arises under the common law, as is the case with a publication ban ...; is authorized by statute, for example under s. 486(1) of the Criminal Code which allows the exclusion of the public from judicial proceedings in certain circumstances (Canadian Broadcasting Corp. v. New Brunswick (Attorney General), [1996 CanLII 184 (SCC), [1996] 3 S.C.R. 480], at para. 69); or under rules of court, for example, a confidentiality order (Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522, 2002 SCC 41).
(Vancouver Sun (Re), [2004] 2 S.C.R. 332, 2004 SCC 43, at para. 31.)
Analysis
29Having regard to the Dagenais/Mentuck test, the first issue for consideration is whether an in camera trial is necessary in order to prevent a serious risk to the proper administration of justice because no reasonably alternative measures will prevent the risk.
30As noted at the outset, the only relief Stikeman claims in the Action is a permanent injunction preventing, among other things, Mr. Gottlieb from publishing and/or disseminating his allegations in the Letter. Stikeman submits that if that occurs prior to the conclusion of the Action, it will effectively deprive it of the remedy it seeks in the Action.
31I agree that depriving Stikeman of the relief it seeks in the Action by permitting dissemination or publication of Mr. Gottlieb’s offending allegations prior to the conclusion of the trial would represent a serious risk to the proper administration of justice. Simply put, a party seeking to prevent the publication of information should not be deprived of that relief as a result of the publication of that information in advance of a determination of the litigation. Such a result impairs the effectiveness of the courts and hence the administration of justice.
32The real issue, in my view, is whether a closed trial is necessary to prevent the above risk or is there some less obtrusive means of preventing the risk? In order to answer that question, it is necessary to examine the conduct that Stikeman seeks to enjoin.
33At issue in the Action are Mr. Gottlieb’s allegations against Stikeman and certain of its partners concerning their conduct in the 1998 investigation and afterwards. While the Letter is not before me, Newbould J., in his reasons for continuing the interim injunction, stated that “the “essence” of the complaint involves the preparation of the transcript of an interview Stikeman conducted with a Livent employee in August 1998. Also, at issue is the subsequent preparation by Stikeman of an Executive Summary which was provided to the Livent Board in August 1998 and the preparation of a subsequent affidavit for use in the litigation.
34Mr. Gottlieb’s allegations against Stikeman concerning the above events were not raised by him for the first time in the Letter. They have been in the public record for some time. They were raised in his 2006 action. The allegation concerning the preparation of the interview transcript was discussed in detail in the October 2006 Globe article. Further, Mr. Gottlieb raised Stikeman’s alleged conduct as part of his defence in the criminal trial. What appears to be new with the Letter is Mr. Gottlieb’s characterization of Stikeman’s conduct. Newbould J. found his allegations in the Letter to be “clearly defamatory” with no evidence of justification.
35In addition, in considering alternatives to an in camera trial, it is also necessary to consider that a sealing order has been in place in the Action from its outset and there is also a sealing order in respect of the Affected Party’s action and trial which will become relevant given that, as I understand, Stikeman intends to rely on some of the documents filed in that trial.
36Given the above circumstances, are there any reasonably alternative measures to protect Stikeman’s interests in its Action?
37Stikeman submits that the answer to that question is no. Specifically, it submits that a publication ban would not be appropriate given its questionable effectiveness as a result of the proliferation of digital technology and social media. In support, it relies on the Penny Decision which canvassed the alternatives, including a publication ban, and concluded there were no reasonable alternatives to an in camera trial.
38On the facts of the case before me, I have reached a different conclusion. Given Mr. Gottlieb’s allegations against Stikeman as noted herein, which are already in the public record, I do not consider that his entire testimony would be subject to a publication ban. The publication ban should be directed to Mr. Gottlieb’s defamatory comments in the Letter. It is Mr. Gottlieb’s characterization of that conduct as expressed in the Letter which is in issue. I consider that a limited publication ban together with sealing or redacting documents as required, would be manageable.
39I am satisfied that if the above noted restrictions are in place, Stikeman’s right to a fair trial will not be rendered nugatory. I am also of the same view recognising that it is possible the information subject to a publication ban may somehow be published during the course of the trial. That information, however, will be provided in the context of a trial with Stikeman presenting its position first followed by Mr. Gottlieb. Further, the likelihood of the trial attracting media attention is slim as evidenced by the fact that no media appeared on this motion. While I recognise there are other ways and means by which information can be released, I consider that to be even more unlikely. The events complained of took place over 20 years ago and as I’ve noted, have been in the public record for some time.
40While I agree that Mr. Gottlieb has a deep personal interest in the allegations he wishes to disperse, I am satisfied that he will respect any decision of the court. There is no evidence that he has breached or not respected the interim injunction which has been in place for almost three and a half years.
41The closed or in camera trial is the most intrusive affront to the open court principle. In my view, given the various interests at stake, it should only be resorted to in the rarest of cases. Given what is already in the public record concerning Stikeman’s alleged wrongful conduct, I have reached the conclusion that a publication ban directed towards preventing publication of Mr. Gottlieb’s defamatory statements in the Letter together with the continuation of Newbould J.’s sealing order is a reasonably alternative measure which will preserve the relief requested by Stikeman in the Action.
42Returning to the second branch of the Dagenais/Mentuck test, and in light of the above, I am satisfied that the salutary effects of the publication ban proposed by me and the continuation of the sealing order of Newbould J. dated September 11, 2015 outweigh the deleterious effects on the rights of both Stikeman and Mr. Gottlieb and the public. While there will be some restriction on the information at trial which can be published, those restrictions are necessary, in my view, to preserve the relief Stikeman seeks in the Action. On the other hand, if Mr. Gottlieb is successful in his defence, he will be free to publish the Letter.
43Accordingly, the motion is allowed, in part. There will be a limited publication ban on the evidence at trial as I have noted herein. The exact wording of the restriction shall be determined by me after submissions from counsel and Mr. Gottlieb at the outset of the trial. Further, the sealing order of September 11, 2015 shall remain in place until the end of the trial. Whether exhibits at the trial need to be sealed or redacted will depend on their content and that should be considered by counsel and Mr. Gottlieb before any exhibit is tendered.
44Finally, the sealing order from the Affected Party’s trial will be respected. Any documents under seal from that trial that are tendered as evidence in the trial shall remain under seal in accordance with that order. Any evidence concerning those documents shall only refer to the allegations, if any, against Stikeman, and not the Affected Party.
45I have drafted these reasons with a view to them being released publically. They will be released to the parties only at this stage and will be sealed pending the conclusion of the trial at which time I will hear submissions concerning their general release.
46Costs of the motion are reserved to be dealt with by me at the end of the trial along with the trial costs.
L.A. Pattillo J.
Released: May 7, 2019