Canada: Records Management @ Gowlings: August 9, 2011

Last Updated: August 15 2011

Edited by Louis A. Frapporti and Christopher Purdon

Legal Technology


Markson v. MBNA Canada Bank, 2011 ONSC 871 (CanLII)

In this class action the plaintiff claimed that the defendant bank had contravened s. 347 of the Criminal Code (charging or receiving interest at a criminal rate) by charging in excess of 60% interest on credit card cash advances.

The plaintiff brought a motion for an order requiring the defendant do conduct a more thorough search of their records, produce a further and better affidavit of documents, and a declarations that legal opinions obtained by the defendant regarding s. 347 were not subject to privilege.

The litigation plan stated that documents to be provided at this stage were those that were "relevant and necessary," and laid out specific categories of such documents. The plaintiff took issue with the document production by the defendant in its original affidavit of documents. Specifically, the plaintiff complained that not all relevant documents had been disclosed, and that the defendant had claimed privilege over documents that it was obliged to disclose.

The plaintiff identified three categories of documents that they sought production of:

  1. communication with cardholders, including communication that explains or gives meaning to the terms of cardholder agreements;
  2. all versions of cardholder agreements, disclosure statements and other documents that communicate or impact on the terms of the agreements with cardholders and the meaning and effect of the terms relating to interest on cash advances, and;
  3. all documents relating to the defendant's consideration of s. 347 of the Criminal Code or the charging of interest at a criminal rate.

During the course of the motion the parties agreed to expand the document search with regards to 1 and 2 (communication with cardholders and cardholder agreements). The judge found that the defendant had made significant efforts to identify and produce relevant documents, however affidavit evidence made it clear that some documents were still missing. The judge disagreed with the defendant's claim that the request for further documents offended the principle of proportionality.

With regards to the disclosure of documents concerning legal advice on s. 347 of the Criminal Code, the judge found that sufficient clarity and particulars had been provided.

The plaintiff argued that the documents were not privileged because the communications "arose in furtherance of an anticipated unlawful or criminal purpose." Also, the plaintiff argued that the defendant had "put its state of mind in issue through its reliance on the voluntariness defence" and had thus waived privilege.

The judge found that since such communication is prima facie privileged, the onus is on the plaintiff to prove that the defendant engaged in such communications for the purpose of committing a crime. The plaintiff had not met the burden of proof in this case. The judge also found that simply because the defendant had relied on the voluntariness defence did not mean that they were required to produce privileged documents.

Ultimately, the judge held that a further and better affidavit of documents be produced with regard to communications with cardholders, and versions of cardholder agreements. However, the request for privileged documents was dismissed.

Webb v. Jones, 2011 ONSC 2479 (CanLII)

In this case involving a pedestrian-vehicle accident, the judge first addressed a discrepancy in the plaintiff's affidavit. The date cited as the date of the accident was incorrectly listed as one year after the statement of claim had been issued. The judge noted that "[i]f affidavits are to be filed based on information and belief, counsel should take care that the deponents have their facts correct."

This motion was for further production of documents, specifically medical records for the plaintiff for three years preceding the accident. The judge noted that the production of these records is dependant on whether they are relevant to the claims made by the plaintiff in the action. Rule 30.02 creates an obligation on the plaintiff to produce "every document in his possession, control or power that is relevant to an issue in the action." This obligation is separate and distinct from the obligation to answer undertakings, and is an ongoing obligation.

The Court used the definition for "relevant" found in the Blacks Law Dictionary, Seventh ed. It provides that a document is relevant if it has probative value. The document must be "logically connected to an tending to prove or disprove a matter in issue." That is, there must be some persuasive value concerning an alleged fact for a given document to be relevant.

Ultimately, the judge found that the requested productions were relevant because the preceding three years of medical records contained information about complaints that were similar to ones that were allegedly attributable to the accident. However, the judge cautioned that this did not allow the defence to go "on a fishing trip through the plaintiff's medical history." It was limited to specific types of complaints and whether they arose before the accident.

The judge indicated that the order to produce the medical documents could be fulfilled by the plaintiff giving the defence authorization to obtain the records at their own expense.

Finally, the judge noted that the obligation to provide ongoing disclosure is necessary for a number of reasons. Specifically, "rolling production" of records facilitates settlement discussions and is necessary for trial preparation

Guestlogix v. Hayer, 2010 ONSC 4384 (CanLII)

The judge in this matter issued a Case Management Memorandum regarding how certain documents were to be disclosed. Originally, plaintiff had sought disclosures in a format other than the disc that the defendant was prepared to produce.

The judge indicated that if the plaintiff continued with their motion to get the production in a specified format, they would have to provide facts and law to answer three questions before the Court:

  1. Is the data sought by the plaintiff available in the format sought?
  2. Why does the plaintiff require the production of the data in the format sought?
  3. What, if any, undue burden would be imposed on the defendants to produce the data in the format sought?

The judge went on to indicate that the answers to these questions would be based on the principle of proportionality found in Rule 1.04(1) of the Rules of Civil Procedure, as well as the e-discovery proportionality from the Sedona Canada principles (Rule 29.1.03(4)).

In this supplemental Memorandum to the original, the judge added a requirement that the parties each serve and file a "Proportionality Chart-Document Production" in the format determined by the Ontario E-Discovery Implementation Committee.

The charts can be found at

Animal Welfare International Inc. v. W3 International Media Ltd., 2011 BCSC 299 (CanLII)

The plaintiff claimed damages alleging that the defendant failed to account for profits earned while the parties were operating an internet-driven animal supplies business. The plaintiff also sought disgorgement of profits earned by the defendant who allegedly continued using the plaintiff's customer list, website and database after the agreement was terminated.

In this application, the plaintiff requested production of certain documents. The documents were classified in one of three categories; a machine readable copy of the database customers of the original website and the defendant's new website, bank statements for any accounts held by the defendant to the date of trial, and pharmacy administrator reports for the original and the new website showing weekly sales, cost of goods, and profits.

Under a Profit Sharing Agreement, the plaintiff and defendant each attended to different aspects of the business, but the profits were to be split 50/50. Between 2007-2008 the plaintiff realized that it was being underpaid, while the defendant was diverting money from the account to itself.

The agreement was terminated in 2009, and the plaintiff sought damages for, in part, the defendant's failure to deliver the database back to the plaintiff, and for using the customer list for its new competing website.

Originally, Justice Rice had ordered that the customer databases of both websites be delivered up to the plaintiff in accordance with a clause in the agreement for division of the assets. This order was appealed and the appeal judge remitted the issue of what conditions should attach to the production of those documents to the trial judge.

The defendant argued that the order of Rice J. should be subject to conditions. First, that the requested data from both the original website and the new conflicting website should be referred to an expert who would obscure all private customer information and code each such entry. Then those customers whose codes appeared on both list would be identified in a list to be produced by the expert to the parties.

The defendant submitted that the customers of the new website had legitimate privacy concerns in terms of their credit card and personal information being supplied to the plaintiff. They also argued that the plaintiff's implied undertaking not to misuse the information obtained on discovery was not enough assurance, since the plaintiff had no employees, assets, or real place of business in British Columbia. The defendant argued that an anonymity system as described above would not prejudice the plaintiff's case, would protect the confidentiality of the customers, and should be paid for by the plaintiff.

The plaintiff argued that the cost of vetting the 30,000-40,000 customer list would be substantial, and that its principals were professionals, so there was no risk of the information being misused.

The Court found that the implied undertaking not to misuse the confidential information was sufficient. Further, the Court noted that there must be some evidence that the party whose information is to be protected had an expectation of confidentiality vis-à-vis the information at issue.

The judge noted that the court should strive to consider the need to protect the privacy interests of third parties in this instance. However, the implied undertaking may be sufficient to ensure that the private information would not be misused by the plaintiff. In coming to this decision, the judge had considered the object of the Rules and the principle of proportionality in Rule 1-3(2). The judge ultimately decided to have the two principals of the plaintiff corporation sign confidentiality agreements.

With regards to the "Pharmacy Administration Reports," the defence counsel attempted to avoid disclosure by distinguishing between "charts" and "reports," only the former of which the plaintiff had specifically requested. The Court held that this semantic distinction did not prevent the defendant from having to disclose all relevant documents.

Finally, Justice Armstrong then went on to consider the electronic data that the Plaintiff requested. Upon considering the Rules of the Court, and the relevant case law, the judge was clear that electronic data falls under the broad definition of "document," and as such must be produced. He added that if the data is stored in electronic form, it must be produced to the Plaintiff in that form.

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