Canada: Records Management @ Gowlings: September 13, 2011

Legal Technology

CASE LAW

Covelli v. Sears Canada Inc.,  2011 ONSC 1850

This decision concerned a motion brought by Sears Canada to strike certain allegations contained in the statements of claim of three separate plaintiffs.  The plaintiffs were alleging that Sears had adopted a corporate policy or practice of terminating employees for just cause as  a means of evading its statutory and common law obligation to provide reasonable notice or pay in lieu thereof.  Sears' position was that the allegations were an abuse of court process and would prejudice and delay the trial by making discovery assume potentially monstrous proportions.  Sears argued that the circumstances leading to the termination of other employees was not relevant.

Sears presented a number of cases mainly in the insurance policy context in which motions to strike were granted on the basis that the allegations would lead to wholesale investigations of all the personnel files of a defendant (Gnanasegaram v. Allianz Insurance Co. of Canada) or would amount to an open ended fishing expedition into the defendant's claims history (Howells v. Manufacturers Life Insurance Co.).

The plaintiffs argued that the allegation of systemic practice was relevant to their claim of bad faith.  They made reference to a number of cases in which allegations of systemic wrong were not struck but allowed to continue on the basis that they could be relevant to an analysis of bad faith.

The court found that the plaintiffs presented the more compelling cases.  Sears' cases were distinguished on the basis that most were from the insurance policy context and that, based on each case's unique factual situation, the number of "similar" cases may have been hard to identify.  However, in the case at hand there were less than 200 cases to be examined that were potentially relevant and that the actual production would likely involve much less than 200 files.

The court found that the case at hand largely turned on whether there was a risk of limitless discovery or discovery of monstrous proportions.  It finds that because parameters can be placed on the discovery process and because there are less than 200 potentially relevant files, a "wait and see" approach should be adopted and that oppressiveness or delay should be resolved only if such issues actually arise.  Accordingly, Master Sproat dismissed the motions brought by Sears against the multiple plaintiffs.

Patzer v. Hastings Entertainment Inc., 2011 BCCA 60

This case is an appeal from an order dismissing an action in which Patzer sought judgment against Hastings on the basis that a ticket voucher from a computer-run ticket machine had been issued to him in the amount of $6.5 million.  After depositing a number of betting slips in the machine, Patzer was given a winning voucher for the amount above.  The trial judge found that the voucher had been issued as a computer or mechanical error.  Further at issue was Patzer's allegation that the doctrine of spoliation applied so as to give him a remedy since Hastings had destroyed all deposited betting slips for the day in question and Patzer was therefore unable to prove how much he had won.  The trial judge found that the doctrine of spoliation did not apply.

On appeal, Patzer argued that the trial judge erred in finding that the tickets were destroyed in the ordinary course of business.  The Court of Appeal held that there were no errors in the reasoning of the trial judge with respect to the facts, the law or the application of the law with respect to the doctrine of spoliation.  The court further holds that Patzer was unable to prove that the tickets he inserted into the machine were winning tickets and as such is unable to prove that contract documents have been destroyed.  Therefore the question of spoliation does not even arise.  However, the court goes further and considers the spoliation argument as if it were necessary.  The court finds that the tickets were destroyed in the ordinary course of business and therefore their destruction was not an act of spoliation.  The tickets were routinely sent for recycling within a week or two of the date of insertion into the machine.  Further, Patzer waited two years to commence the action and so it would have been more than reasonable for Hastings to have destroyed the tickets by then especially after an employee had already informed Patzer that the ticket had been issued in error.



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