COURT FILE NO.: CV-13-0164-00 DATE: 2023-03-02

Superior Court of Justice - Ontario

B E T W E E N:

Resolute Forest Products Inc., Resolute FP US Inc., Fibrek General Partnership, Fibrek U.S. Inc., Fibrek International Inc. and Resolute FP Canada Inc. Plaintiffs

- and -

2471256 Canada Inc. DBA Greenpeace Canada, Richard Brooks and Shane Moffatt Defendants

Counsel: Arthur Hamilton and Colin Pendrith for moving party, Plaintiffs Spencer Bass for responding party, Defendants

HEARD: February 21, 2023, at Thunder Bay, Ontario

Mr. Justice F. Bruce Fitzpatrick

Judgment on Motion

[1] The five plaintiffs in this action (Resolute) bring a motion seeking an order, pursuant to Rule 30.1.01(8) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, that the deemed undertaking rule does not apply to the defendants’ 2471256 Canada Inc. dba Greenpeace Canada, Richard Brooks, and Shane Moffatt discovery evidence, including documentary productions (the Documents) or the information obtained therefrom, for the purpose of allowing such evidence to be used in an action commenced in the United States in the United States District Court of the Northern District of California as Case No 17-cv-0824 JST (the US Action).

Background

[2] I have been case managing this matter since 2013. It is a complex commercial matter involving sophisticated litigants. I have written a number of decisions dealing with procedural matters between these parties. In the 2016 decision of the Divisional Court (Resolute Forest Products Inc. v. 2471256 Canada Inc., 2016 ONSC 5398) dealing with an early ruling in this matter, Corbett J. at paras. 1 and 2 generally described this litigation as:

[1] The plaintiffs, affiliated paper companies (collectively "Resolute"), sue the defendants, Greenpeace Canada and two of its employees (collectively "Greenpeace"), over "activist" strategies employed by Greenpeace in respect to Resolute's alleged activities in Canada's boreal forests. Central to the claim are allegations that Greenpeace has been deliberately, persistently and aggressively untruthful in its characterization of Resolute's conduct, all for the purpose of coercing Resolute and its customers.

[2] Greenpeace, for its part, says that these proceedings are a so-called "SLAPP suit" designed to hobble Greenpeace financially, not as a result of any judgment that may be obtained, but by the litigation process itself, and thus to deter Greenpeace and other public advocacy groups from pursuing their activities against well-financed opponents.

[3] This is an apt description of the background of this case. This action continues, eight years since it was commenced, to involve a claim by Resolute for defamation and intentional interference with economic relations. The matter is not presently on the trial list at Thunder Bay. The matter has not had a pretrial.

[4] The US Action was commenced in 2016 in Georgia and was then transferred to Northern California. Apparently, it has moved along in a more expedient fashion. The discovery process is complete. The defendants are moving for summary judgment on April 26, 2023. If that motion is not successful the matter is scheduled to be tried by a jury commencing July 31, 2023.

The Law

[5] Rule 30.1 codifies the common law of the implied undertaking in respect of evidence obtained during the civil discovery process. The deemed undertaking rule provides that evidence and information obtained pursuant to the Rules during the discovery process cannot be used for any purpose extraneous to the litigation for which it was produced. Rule 30.1.01(3) provides:

30.1.01(3) All parties and their lawyers are deemed to undertake not to use evidence or information to which this Rule applies for any purposes other than those of the proceeding in which the evidence was obtained.

[6] Rule 30.1.01(4) through (6) contains the following exceptions to the deemed undertaking rule:

(4) Subrule (3) does not prohibit a use to which the person who disclosed the evidence consents.

(5) Subrule (3) does not prohibit the use, for any purpose, of,

(a) evidence that is filed with the court;

(b) evidence that is given or referred to during a hearing;

(c) information obtained from evidence referred to in clause (a) or (b).

(6) Subrule (3) does not prohibit the use of evidence obtained in one proceeding, or information obtained from such evidence, to impeach the testimony of a witness in another proceeding.

[7] Rule 30.1.01(8) provides the Court with discretion to waive the deemed undertaking rule when the interest of justice outweighs any prejudice that would result to the disclosing party. Waiving the deemed undertaking rule allows the disclosure of evidence for purposes beyond the present litigation. If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) does not apply to the evidence or to information obtained from it and may impose such terms and give such directions as are just.

[8] An order that the deemed undertaking does not apply requires an exercise of discretion on the part of the Court. The leading decision of the Supreme Court of Canada on the issue of the deemed undertaking is the case of Juman v. Doucette, 2008 SCC 8. While the case dealt with a situation where a party sought to prevent disclosure of discovery evidence from a civil matter to the police, the Court gave clear guidance on general principles to be applied when a court is being asked to exercise its discretion in favour of a waiver of the deemed undertaking rule.

[9] At paragraphs 23 through 28 the Court discusses the rationale for rules of court dealing with deemed undertaking. The necessary balance between litigants’ privacy interests and the public interest in getting at the truth in a civil action is discussed. This balance provides that “[t]he answers and documents are compelled by statute solely for the purpose of the civil action and the law thus requires that the invasion of privacy should generally be limited to the level of disclosure necessary to satisfy that purpose and that purpose alone”: Doucette at para. 25.

[10] At paragraph 30 the Court recognized that exceptional circumstances may trump the deemed undertaking rule. Binnie J. stated:

[30] The undertaking is imposed in recognition of the examinee’s privacy interest, and the public interest in the efficient conduct of civil litigation, but those values are not, of course, absolute. They may, in turn, be trumped by a more compelling public interest. Thus, where the party being discovered does not consent, a party bound by the undertaking may apply to the court for leave to use the information or documents otherwise than in the action, as described in Lac d’Amiante, at para. 77:

Before using information, however, the party in question will have to apply for leave, specifying the purposes of using the information and the reasons why it is justified, and both sides will have to be heard on the application.

In such an application the judge would have access to the documents or transcripts at issue.

[11] At paragraph 32 Binnie J. continued;

[32] An application to modify or relieve against an implied undertaking requires an applicant to demonstrate to the court on a balance of probabilities the existence of a public interest of greater weight than the values the implied undertaking is designed to protect, namely privacy and the efficient conduct of civil litigation. In a case like the present, of course, there weighs heavily in the balance the right of a suspect to remain silent in the face of a police investigation, and the right not to be compelled to incriminate herself. The chambers judge took the view (I think correctly) that in this case that factor was decisive. In other cases the mix of competing values may be different. What is important in each case is to recognize that unless an examinee is satisfied that the undertaking will only be modified or varied by the court in exceptional circumstances, the undertaking will not achieve its intended purpose.

[12] At paragraph 35 Binnie J. discussed circumstances where material in one action is being sought in another action with the same or similar parties will generally lead to a conclusion that prejudice is virtually non-existent. At paragraph 36 he qualified this observation by stating, “[o]n the other hand, courts have generally not favoured attempts to use the discovered material for an extraneous purpose, or for an action wholly unrelated to the purposes of the proceeding in which discovery was obtained in the absence of some compelling public interest.”

[13] At paragraph 38 Binnie J. directed that an applicant seeking waiver bears the onus to demonstrate a superior public interest in disclosure and that the undertaking should only be set aside in exceptional circumstances.

Positions of the Parties

[14] Resolute argues the parties to this action and the US action are similar. The issues to be determined in both actions are the same or similar. There is no prejudice to the defendants in this action and the interests of justice favours waiving the deemed undertaking rule in respect of all the discovery evidence in this action.

[15] The defendants argue Resolute has not met its onus of demonstrating that a superior public interest trumps the inherent rights afforded to the defendants by the deemed undertaking rule. Further the motion is practically a collateral attack on orders made in the US Action with respect to productions of documents and the scope of the US action. Finally, the defendants argue Resolute has already breached the deemed undertaking rule and should be denied discretionary relief as it does not come to court with “clean hands”.

Decision

[16] I am advised that there are about 10,000 documents that have been produced in this litigation. Resolute seeks a waiver with respect to all of them. On this motion, I have been provided with “examples” of certain documents that the Resolute plaintiffs in the US action “might” want to use in the upcoming trial of their action in California. I note Binnie J.’s comment in the last line of paragraph 30 of the Doucette decision supra that a judge on these waiver applications should have access to all the documents and transcripts at issue.

[17] I did not have access to all the documents and transcripts at issue. I expect there was a practical reason for this. The parties booked this motion for half a day. Filing 10,000 documents in Caselines would not have worked. Resolute’s counsel was, as usual, fair and frank with the court that the US action was not his brief. He admitted he did not know exactly what documents or evidence American counsel would want to rely upon at the upcoming trial. The court appreciated the candour of Resolute’s counsel.

[18] Counsel for Resolute also raised what was referred to as the “empty witness chair” argument. That is to say, without a waiver of the deemed undertaking the US plaintiffs would be unfairly left unable to prove some aspect of their case.

[19] That argument left me with more questions than I had answers in the material before me on this motion. The US parties are five months away from trial. I have no reason to believe that Resolute is represented by anything less than top US litigation counsel. In this matter Resolute could not tell me precisely what was required other than wanting a blanket waiver over everything. Having to engage in speculation was not of assistance to Resolute’s cause on this motion. In my view Resolute was not sufficiently particular about what exactly it wanted and why. This made it difficult to determine that an exercise of discretion was warranted in this matter.

[20] Resolute put some emphasis in argument about the necessity for a waiver so that American counsel would be able to properly impeach any of the US defendants’ evidence at trial. Counsel for the defendants at that point in the Resolute submission was allowed to demonstrate the answer to this argument given in Rule 30.1.01(6).

[21] Rule 30.1.01(6) provides there is no breach of the deemed undertaking rule in Ontario where documents, admissions or evidence obtained through civil discovery process in Ontario are used “to impeach the testimony of a witness in another proceeding”. Proceeding is a defined term in the Rules as being “an action or an application”. The definition does not put a geographic limit on where the proceeding is commenced. It does not limit the proceeding to those occurring in the province of Ontario. In other words, Rule 30.1.01(6) does not prohibit discovery evidence obtained in an Ontario proceeding from being used to impeach a witness in another proceeding arising in the United States.

[22] I interpret the provisions of as giving a protection to a party in Ontario from remedy sought in Ontario for any alleged breach of the deemed undertaking rule where the alleged breach occurred in the context of the use of documents, admissions or evidence in any other adjudicative process where the use is or was directed at impeaching the testimony of a witness participating or deemed to be participating in that adjudicative process. Further I interpret “proceeding” as meaning an adversarial or inquisitive adjudicative process where an independent third-party arbiter is presiding over a process where testimony, written or oral, premised and subject to oath or affirmation is presented for consideration by that arbiter.

[23] The rationale for the exception in Rule 30.1.01(6) makes sense. It deals with defined circumstances. It does not allow the necessary privacy objectives of the deemed undertaking rule to provide protection for a party saying one thing in one adjudicative proceeding and something else in another. It facilitates effective cross examination, one of the great tools of the truth-seeking function.

[24] Rule 30.1.01(6) is but one of four express exceptions in the Rules to the deemed undertaking rule. Those other exceptions provided in (4), (5) and (7) are those occasions of the process of the search for the truth which are not at issue here. For example, Resolute has not asked for consent to a waiver from the defendants as provided in Rule 30.1.01(5).

[25] Therefore, I am left to consider if the materials before me provide one of those exceptional circumstances where there is a superior public interest in the search for the truth which otherwise overbears the express provisions of the deemed undertaking rule set out in Rule 30.1.01(3).

[26] Resolute puts great emphasis on “commonality” of issues and parties between the two matters. I am not persuaded by this argument. In fact, I have expressed a view to the contrary in an earlier decision I made in this matter Resolute Forest Products Inc. v. 2471256 Canada Inc. DBA Greenpeace, 2017 ONSC 5383. In dealing with a motion by the defendants to stay the within action in the face of the US action, I found at para. 48:

[A]s the defendants are different in the two actions, I do not find that the same actions, allegations and conduct are at issue in both actions to the degree necessary to exercise my discretion to permanently stay the Canadian Action.

[27] As noted above, at paragraph 35 of Doucette Binnie J. points out that where parties and issues are the same or similar in different proceedings the prejudice to the party having the benefit of the deemed undertaking will be practically non-existent. This is not the case in this matter.

[28] The individual named parties are different. Practically they may not be the target of this motion by Resolute. However, I am not prepared to find that the corporate US defendants and the Canadian corporate defendants in this action are sufficiently the same or similar that I would be persuaded to exercise my discretion to waive the deemed undertaking.

[29] I am also not persuaded that the circumstances in this case are an occasion where the Ontario public interest would overbear the privacy protections of the deemed undertaking rule. It seems to me that the Canadian public interest in the truth-seeking function of the US courts is much reduced once it reaches our southern and their northern border. I agree with Resolute’s submission that is not the role of the Canadian court to interpret the decisions of our American counterparts. That said, I think the Canadian public is fairly confident in the workings of the United States civil justice system. I do not have to interpret the decisions of American judges to nevertheless recognize the US courts are very much alive to the issue of what documents are relevant in their matters, what documents are in the possession of parties to their litigation and how robust and efficient their civil process is in securing a fair and just resolution of disputes. They had a discovery process in the US. That process is now long closed and the parties are on the eve of trial.

[30] In this case, Resolute seeks sweeping relief: an order that the deemed undertaking does not apply to thousands of documents produced during the Ontario discovery process. If this relief was to be granted the court would require much better evidence that some significant injustice would occur in the U.S. proceedings without the Ontario evidence in hand.

[31] I was not persuaded that waiving the deemed undertaking rule is required in this case where the US matter has been subject to an equally fair, just and equitable civil system as ours in Ontario. I just do not see that the public interest will be served by waiving the deemed undertaking from our courts particularly where the parties – and potential issues – in the American proceedings are different.

[32] In my view in order to resolve this motion there is no need to consider the defendants assertion concerning Resolute alleged breach of the deemed undertaking rule. I make no findings concerning that argument one way or the other.

[33] For all these reasons the motion is dismissed. Costs payable by Resolute to the defendants forthwith fixed in the amount of $10,000.00 inclusive of disbursements and tax as previously agreed by counsel.

“original signed by” The Hon. Mr. Justice F.B. Fitzpatrick Released: March 2, 2023