Canada: Legal Technology

CASE LAW

Hollinger Inc. (Re), 2012 ONSC 5107

This motion decision was released in 2012 by Ontario Superior Court of Justice during a CCAA proceeding under which Hollinger Inc. was granted protection in 2007. Hollinger lodged five groups of claims against its (i) former counsel Torys LLP; (ii) former auditor KPMG LLP; (iii) six former outside directors; (iv) former inside directors and officers including Conrad Black, and related parties; (v) Members of former banking syndicate.

Conrad Black filed damages for breach for contract, asserting to be the largest creditor of Hollinger. But he took no further step to advance such claim since 2008. Hollinger reached settlement agreements with Torys, KPMG and former outside directors (Settling Defendants) pending on court approval. Non-Settling Defendants attacked the settlement on several grounds, which were all rejected by the court.

Black and his related defendants ("Black Defendants") first argued that the court had no jurisdiction because the proposed settlements failed to benefit all of Hollinger's creditors. The proceeds as claimed by the Black Defendants would be used to fund the litigation against Black Defendants instead of being distributed to its creditors. Campbell J. concluded that the court has jurisdiction consistent with the principles of the CCAA to maximize the assets available to creditors as long as the process is not being used to further a collateral objective that is not inconsistent with the ultimate goal of these CCAA proceedings.

The Non-Settling Defendants further argued that the third party release and Bar Orders as part of the settlements would deprive the remaining defendants of substantial rights for discovery. Alternatively, the Non-Settling Defendants requested, if the settlements are approved, an order that would provide the Non-Settling Defendants with the same opportunity for discovery and examination as if Torys and KPMG were to continue as defendants.

Hollinger argued that the third party release is a typical "Pierringer agreement" (name after Pierringer v. Hoger, 124 N.W. 2d 106) which permit some parties to withdraw from litigation, leaving the remaining defendants responsible only for the loss that they may be found to have actually caused, with no joint liability.

Campbell J. held that Pierringer agreements have been increasingly used in Canada in different litigation settings and in this case the terms did not prejudice the remaining defendants in respect to liabilities. Campbell J. acknowledged the potential detriment to the remaining defendants, but opined that any detriment should be balanced against the benefit to the Settling Defendants and to the plaintiffs as well as the administration of justice as a whole, which encourages settlements in general, on a case by case basis.

Torys and KPMG proposed similar protocols for production and discovery. Campbell J. held that the discovery of documents could be achieved under court management based on the protocols, thus it was not necessary to request the parties conduct themselves as if Torys and KPMG remain as defendants.

As above, the Court approved the settlement agreements, requesting Torys and KPMG be bound by their protocols and participate in the litigation as Non-Parties subject to management by the court.



Descartes Systems Group Inc. v. Trademerit Corp. et. al., 2012 ONSC 5283

When plaintiff, Descartes, acquired all outstanding shares of a corporation, ViaSafe Inc., certain former shareholders agreed not to subsequently compete with Descartes and not to misuse confidential information now belonging to Descartes. Litigation was initiated when three individual defendants allegedly breached the non-compete agreements and misappropriated confidential information.

This particular matter before the court addressed the handling of Descartes' confidential electronic information stored in one defendant's personal laptop. Although the laptop was no longer available, the information had been backed up onto a hard drive and made available to Descartes for the purposes of forensic analysis with two caveats: first, that the irrelevant personal information be protected; and second, that relevant documents found be produced for defendants' review.

Following conflict over responsibility regarding the forensic review, the court addressed the following matters: (i) whether the external hard drive should be preserved; (ii) whether a third party should conduct the forensic analysis; (iii) whether the defendant should be obligated to review certain e-mails for determining privilege; and (iv) whether the plaintiff may conduct a forensic analysis of the multiple iterations of backup files in the hard drive.

(i) Preservation of the Hard Drive

Because the hard drive contained information from the personal laptop which was admittedly used for business purposes and routinely used to download e-mails in the course of business, there existed "more than adequate reason to preserve the hard drive and to permit forensic examination." In any case, the defendant had already agreed to forensic examination of the hard drive, necessitating the maintenance of the disk.

(ii) Third Party Forensic Analysis

The court commented that when the hard drive was turned over, counsel were not sufficiently specific in determining what was meant by "forensic analysis." The defendant took the view that forensic analysis retained its ordinary meaning of reviewing the drive to determine when information was written onto the drive, who authored documents, what documents were deleted, and whether documents were altered. The plaintiff's firm, however, took the view that forensic analysis meant accessing and reviewing the documents themselves, more appropriately characterized as document review.

Consequently, rather than employing a third-party forensic analyst, plaintiff's counsel conducted an in-house review with the support of paralegals and staff consisting of document review. This was done in two stages: first, potentially relevant documents were identified using paralegal staff and Clearwell software; second, the potentially relevant documents were imported into Summation where they were manually reviewed for relevance and de-duplication by the law clerks and an associate lawyer.

Although agreeing that communications leading up to the forensic analysis indicated a forensic review rather than document review would be conducted, the court held that plaintiff's counsel had done nothing improper. Rather, plaintiff's counsel disclosed to the defendant potentially privileged documents and did not access them.

Nonetheless, because the data explored would contain irrelevant confidential information and apparently privileged information, and because the personnel conducting the analysis may have to be called as witnesses at trial, the court ordered that an outside expert be employed to conduct the forensic analysis. Further, in the interests of transparency, the court ordered that the plaintiff's counsel disclose fully what tests, searches, and reviews took place, what was found, and to whom access was provided.

(iii) Defendant's Obligation to Review Privileged Files

Upon identification of potentially privileged information between the defendant and the defendant's prior counsel, Descartes requested defendant's review of the information to identify the documents over which privilege had been waived in accordance with a prior finding of the court. The defendant refused but also refused permission for plaintiff's counsel to do the same.

The court found defendant's refusal to review unreasonable and found defendant's refusal of plaintiff's review "doubly unreasonable." Thus, the court directed the defendants to review the documents and produce any documents over which privilege had been waived. In the alternative, the court directed that privilege could be waived entirely permitting the plaintiff to conduct the review.

(iv) Forensic Analysis of backup files

During backup, 448 Zip files had been created in addition to archived files. When asked by the plaintiff to review these multiple iterations, the defendant refused explaining that recourse to backup files is not normal within the scope of documentary production.

The court agreed with the Sedona Canada Principles that electronically stored information should be produced only if reasonably accessible, and absent a court order or agreement, a party should not be required to search and produce deleted or residual electronic information. However, although not ordinarily required to search backup files for deleted documents, a party may be required to do so depending on the needs of the case and the ease of doing so.

In this case, the needs of the case required answering two critical questions: (1) what steps the defendant took to establish a new business, particularly the timing of the recruitment of staff and clients; and (2) whether the defendant possessed and accessed proprietary information and whether that access was after leaving Descartes. Accordingly, reviewing the backup files could elucidate information regarding timing that addressed the fundamental questions of the case regarding access to proprietary information and competing with Descartes.

The court, then, ordered forensic analysis of the backup files. However, it tempered that order by directing that forensic tools be employed to narrow the number of files from 448 to those in the relevant time period and of the relevant type to reduce the risk of accessing privileged information.

Finally, the court suggested that because other technical, factual, or legal issues may arise, the parties were permitted to agree to a plan different from the plan set out in the order.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

17 Dec 2016, Other, Ontario, Canada

Podcast summary

In the inaugural episode of Diversonomics, co-hosts Roberto Aburto and Sarah Willis introduce listeners to the podcast and discuss their experiences with diversity and inclusion in the legal industry. They also outline some of the obstacles the profession faces with respect to adopting new strategies and overhauling old practices.

22 Dec 2016, Other, Toronto, Canada

Podcast summary

For episode two of Diversonomics, co-hosts Roberto Aberto and Sarah Willis interview Mark Greenburgh, a partner in Gowling WLG's London office. They discuss the exciting new diversity and inclusion opportunities that have arisen since the combination of Gowlings and Wragge Lawrence Graham, as well at Gowling WLG UK's LGBT OpenHouse initiative.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.