Canada: Records Management @ Gowlings: April 26, 2012 - Volume 3, Number 4

Last Updated: May 1 2012

Edited by Louis A. Frapporti and Christopher Purdon

In this issue:

  • Legal Technology
  • News and Articles



Evans v. Mobile County Health Department No. CA 10-0600-WS-C, 2012 WL 206141 (S.D. Ala.)

Motion by the defendant to compel production and for an order dismissing the plaintiff's lawsuit as a sanction for intentional destruction of relevant evidence.  In the main action, the plaintiff sued Mobile County Health Department ("Mobile") for discrimination on the basis of race.  Plaintiff admitted to burning her personal computer in July 2011, roughly 8 months after she began her action.  Further, subject to an order dated June 23, 2011, the plaintiff was to take steps to preserve all electronically stored information ("ESI") in her possession.  The plaintiff's motion to compel was granted as there was no doubt that the productions sought were relevant to the action.

With respect to the motion for sanctions, the defendant argued that the destruction of the computer should result in the dismissal of the lawsuit.  The Court defined spoliation as the intentional destruction, mutilation, alteration or concealment of evidence.  The Court held that federal law governs, but because specific guidelines for the imposition of sanction guidelines have not been set federally, courts may look to state law principles for guidance so long as they do not conflict with general federal spoliation principles.  Since dismissal represents the most severe sanction available it should only be exercised where there is a showing of bad faith and where lesser sanctions will not suffice.

The Court further considered the following five factors: 1) the importance of the evidence destroyed; 2) the culpability of the offending party; 3) fundamental fairness; 4) alternative sources of the information obtainable from the evidence destroyed; and 5) the possible effectiveness of other sanctions less severe than dismissal.  The Court held that there could be little doubt that the information stored on the computer was important.  One alternative source of information identified was the plaintiff's e-mail address.  However, this account would not be able to supply all of the missing information.  The Court assessed the plaintiff's culpability as excessively high since the computer was destroyed after the lawsuit was commenced and after an order for preservation was made.  The plaintiff knew that the computer contained important information since she testified to as much.  Prejudice to the defendant was established via the gaps in the plaintiff's narrative.  The very destruction of the evidence justified a finding that the destroyed evidence prejudiced the defendant.  The Court held that lesser sanctions than dismissal would suffice since the defendant was not left in a position where it would be unable to defend itself.  Accordingly, the Court ordered an adverse inference instruction and awarded the defendant its costs. 

Markson v. MBNA Canada Bank, 2011 ONSC 871

Certified class action – Charging or receiving of interest at a criminal rate – Common issues – Discovery obligations – Relevance - Proportionality – Privilege – Disclosure obligations regarding privileged documents and communications – Exceptions to privilege – Future crimes – Voluntariness defence

This motion brought by the plaintiff in a certified class proceeding involved a dispute regarding the defendant's documentary disclosure.  The class action concerned alleged criminal interest rates charged by the defendant regarding cash advances made by credit card holders.  Following certification, a litigation plan was approved regarding the bifurcating of proceedings to liability and damages.  This motion related to documentary production regarding the first phase proceedings, concerning the common issues as certified and not quantum and punitive damages.

The plaintiff alleged that the defendant had not produced all relevant documents and that it had claimed privilege over documents that it was obliged to produce.  The plaintiff's main objection to the disclosure by the defendant was the failure to produce a number of omitted versions of cardholder agreements and documents that may impact the meaning of those agreements.  The plaintiff further argued the defendant failed to produce a number of other relevant documents.

The plaintiff argued for three categories of additional disclosure sought, each linked to the common issues: i) communications with cardholders that explains or gives meaning to cardholder agreements; ii) all versions of cardholder agreements, disclosure statements or other documents impacting or giving meaning to cardholder agreements, including the charging and calculation of interest on cash advances; and iii) all documents relating to the defendant's charging of an alleged criminal interest rate or receiving such interest.

In the initial portion of its analysis, the court noted that the parties were able to agree upon a number of the issues raised on this motion, with the exception of the privilege issue.  The court noted that the defendant would continue to run additional searches for documents on the terms proposed by the plaintiff and approved by the court.  The court also noted the significant discovery efforts made by the defendant to the point of the motion and considered the defendant's argument that the plaintiffs' requests offends the principle of proportionality.  The court rejected this argument by stating the there was nothing unreasonable or unusual about the plaintiff's requests as the documents were relevant to one or more common issues and the plaintiff had demonstrated that the documents which were being sought were missing from the defendant's productions.

The remainder the court's analysis considered the defendants claims to privilege regarding certain documents.  The plaintiff sought both a more detailed description the documents to which the defendant was claiming privilege and production of legal opinions obtained by the defendant or produced internally together with any documents referencing those opinions with respect to the issue of charging or receiving interest at a criminal rate. 

The court first reviewed the legal obligations of the defendant regarding the disclosure of privileged documents and communications and held that, with the exception of a few documents, the defendant had described each of the privileged documents with sufficient clarity and information to allow the court to assess the claim for privilege over all of the documents, thereby satisfying its obligations in that respect. 

Secondly, the court considered the plaintiff's arguments that: i) the privileged documents arose in furtherance of a criminal purpose and are therefore not privileged; and ii) the defendant put its state of mind at issue through reliance on the voluntariness defence and thus waive privilege over documents on which its state of mind is based. 

The future crimes exception argument was unsuccessful due to the plaintiff's failure to meet its onus of demonstrating the exception to the prima facie privilege claimed.  The fact that the defendant was aware of Canadian usury laws and sought legal advice did not demonstrate that its communications with counsel were undertaken for the purpose of committing a crime, as alleged.  Further, the mere temporal relationship between the defendant's awareness and when they sought legal advice was held to be clearly insufficient to draw this conclusion.  The voluntariness exception also failed on the basis that the fact that the defendant had pleaded the defence of voluntariness does not require production of privileged documents regarding communications with lawyers.

Accordingly, the court ordered the defendant to undertake further searches regarding documentary disclosure and production and dismissed the plaintiffs' claims regarding the production of privileged documents.

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