I think any privacy lawyer would have predicted the result of this Ontario court decision about whether you can use PIPEDA as a shield against answering questions in the course of litigation, but it is good to have authority on the point. The full text of the decision is available on CanLII at http://www.canlii.org/on/cas/onsc/2004/2004onsc11636.html. Below is an excerpt of the relevant portions of the decision.

FILE NO.: 03-CV-251465-CM1

DATE: 20040706

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Clustercraft Jewellery Manufacturing Co. Ltd. - Appellant

- and -

Wygee Holdings, Ltd. Artam Diamonds International

Inc., and Enterprising Promotions Ltd. - Respondents

BEFORE: T. Ducharme, J.

COUNSEL: D.R. Rothwell

For the Appellant

R. Shour

For the Respondents

MOTION

HEARD: July 2, 2004

E N D O R S E M E N T

[1] The Plaintiff/Appellant ["Appellant"] appeals from an interlocutory order made on April 20, 2004 by Case Management Master Carol Albert which:

(a) granted leave to amend the Statement of Defence and Counterclaim;

(b) gave directions for further examinations for discovery;

(c) ordered answers to three questions which had been refused during the discovery of Einhardt Wiedel; and

(d) awarded and fixed costs payable by the plaintiff of $2,100.

The Appellant asks that this order be set aside and an order be made instead in terms as set out in paragraph 2 of their factum.

[2] The Parties are agreed that the appropriate standard of review is that set out in Bank of Nova Scotia v. Liberty Mutual Insurance Co., [2003], O.J. No. 4474 (Div. Ct.):

(a) if the matter is one of discretion, the court should not interfere unless the Master was clearly wrong;

(b) if the matter is one of law that is not vital to the disposition of the lawsuit, the court should not interfere unless the Master was clearly wrong; and

(c) if the matter is one of law that is deemed vital to the disposition of the lawsuit, the test should be one of correctness.

Moreover, where the Master is dealing with interlocutory matters not vital to the disposition of the case, the motion ought to be heard as an appeal and not de novo.

The Granting of Leave to Amend the Statement of Defence and Counterclaim

[3] Master Albert granted leave to amend the Statement of Defence and Counterclaim. The Appellant concedes that many of these amendments were in the nature of housekeeping amendments, but objects to the addition of the name of one Alan Grelowski to paragraphs 53 and 58 of the Statement of Defence and to paragraph 137(i) of the Counterclaim. The Appellant advances two arguments: (1) There was not a sufficient factual basis in the motion record before the Master to permit this amendment; and (2) The amendments caused prejudice to the Appellant insofar as they result in a re-attendance for further examination for discovery.

[4] The granting of the amendments to the pleadings is governed by Rule 26.01 which provides that the court shall grant leave to amend a pleading unless prejudice would result that could not be compensated for by costs or an adjournment. As Moldaver J.A. noted in Andersen Consulting Ltd. v. Canada (Attorney General), [2001] O.J. No. 3576 at paragraph 37 (Ont. C.A.) there is a:

well-established rule that amendments like those sought in the present case should be presumptively approved unless they would occasion prejudice that cannot be compensated by costs or an adjournment; they are shown to be scandalous, frivolous, vexatious or an abuse of the court's process; or they disclose no reasonable cause of action.

It is worth noting that Moldaver, J.A. made no mention of some minimal factual support in the record as being a further prerequisite to the granting of leave to amend the pleadings. Indeed, the balance of Andersen Consulting Ltd. suggests precisely the opposite, as the motions judge was criticized at paragraph 35 for "weighing evidence, interpreting controversial contractual provisions and making findings of fact, all matters that should have been avoided at the pleading stage." Counsel for the Appellant was unable to cite any authority for the proposition that amendments to pleadings can only be granted where there is a sufficient factual basis for them outlined in the motion record. In my view, this argument must be rejected as it is clearly inconsistent with the presumptive approval test mandated by Rule 26. It should also be noted that the reasons for these amendments were explained in the Case Management Motion Form filed before the Master. While the Appellant may dispute the factual basis for these assertions that is a matter for trial.

[5] The argument that the amendments resulted in prejudice that cannot be compensated for "by costs or an adjournment" can be dispensed with quickly. As Master Albert noted there was no evidence that any prejudice would result from the six month delay. Moreover, the prejudice identified on appeal that is, the need to re-attend for further examinations for discovery, is precisely the type of prejudice that can be dealt with by way of costs and/or an adjournment. Thus, it cannot be maintained that the amendments should have been refused on this basis.[1] In oral argument, the Appellant conceded that this prejudice could be remedied by costs and asked that this Court make an order in this regard. However, as the Appellant sought no such relief in argument before the Master, it would not be appropriate to order costs when the matter was not raised at the first instance.

[6] As a result, the order permitting the Respondent to amend the Statement of Defence and Counterclaim is upheld.

The Order to Answer Questions Which Had Been Refused

[7] Master Albert ordered that questions 659, 698 and 956 which had been refused upon the examination of Einhard Wiedel should be answered. Both parties agree that the numbers of the first two questions was misidentified and that the questions to be answered were 879, 899 and 956. The Appellant does not rely on this error and the parties are agreed that these questions related to the provision of names and addresses of employees, the length of service of employees and the names addresses and telephone numbers of former employees since 1999. Here again the Appellant argues that there was an insufficient factual basis in the record before the Master to support this order. The Appellant also argues that these refusals should have been sustained as the questions were irrelevant and because the disclosure of such information was prohibited by the Personal Information Protection and Electronic Documents Act( 2000, ch. 5).

[8] The pleadings in any civil action form the terms of reference for discovery and relevance at discovery is broader than at trial. There is no requirement that the proposed questions be factually supported by the motion record and, once again, counsel for the Appellant was unable to cite any authority for that proposition. The applicable standard here is the "semblance of relevance" test articulated by Steele, J. in Kay v. Posluns (1989), 71 O.R. (2d) 238 (H.C.). As Master Albert found, the information relating to employees and former employees of the Appellant is relevant to paragraphs 99 to 106 of the Statement of Defence and paragraph 27 of the Reply and Defence to Counterclaim. These employees may have information relating to the 308.73 carats of diamonds that the Appellant alleges were never delivered to them. As such these questions are relevant and, with respect to questions 879 and 956, expressly authorized by Rule 31.06(2). This order was a discretionary one and, applying the proper standard of review, it cannot be said that Master Albert was clearly wrong.

[9] As for the Appellant's submission that the disclosure of this information would be prohibited by the Personal Information Protection and Electronic Documents Act( 2000, ch. 5) this ignores the express provision of section 7(3)(c) of that Act which provides, in relevant part:

(3) . . . an organization may disclose personal information without the knowledge or consent of the individual only if the disclosure is

(c) required to comply with a subpoena or warrant issued or an order made by a court, person or body with jurisdiction to compel the production of information, or to comply with rules of court relating to the production of records.

At a minimum, the order of Master Albert is an order made by a court with jurisdiction to compel the production of information. Thus, this submission of the Appellant also fails.

[10] As a result, the Master's order is upheld and the Respondent is ordered to answer questions 879, 899 and 956.

The Order to Re-attend for Further Examinations for Discovery

[11] At the outset, the parties are agreed that the Master should not have ordered re-attendance as a result of the amendments to the pleadings as the Respondent made no such request before her. They are agreed that, if the order to re-attend is sustained, it should be in relation only to undertakings and refusals subsequently answered. I agree.

[12] Here again the Appellant argues that there was an insufficient factual basis in the record before the Master to support this order. In this regard, the Appellant relies on the decision of Master Beaudoin in Central Guaranty Trust Co. v. Beebe Estate, [1997] O.J. No. 4882 where he states at paragraph 7:

Rule 31.06 certainly contemplates only one oral examination for discovery. As to whether or not there is a right to further discovery, once again I am presented with conflicting authorities by counsel. The plaintiff relies on I.C.S. Construction Ltd. v. GKN Birelco Ltd., [1991] O.J. No. 597, (March 13, 1991), Doc. CLA 162/87 Forestell J. (Ont. Gen. Div.) whereas the defendants rely on Christie Corporation v. Alvarez (1994) 34 C.P.C. (3d) 92, a decision of Mr. Justice McNeely which distinguishes the J.C.S. Construction case. Upon reading these decisions, I am satisfied that there is no automatic right by one party to compel the re-attendance of another merely because the other party has complied with an undertaking or provided an answer after a discovery.

I believe the decision of McNeely J. gives some guidance in this regard in that he suggests the moving party must demonstrate why reattendance would serve a useful purpose. In this instance, I believe it would be helpful for the court to have, by way of affidavit, an indication of what areas need to be explored through further oral examination on discovery.

It is not sufficient to accept, as submitted by plaintiffs counsel, that the opposing party can object if counsel, on re-examination strays into areas previously responded to or into areas upon which he may not be entitled to re-examine.

[13] I accept that there is no automatic right by one party to compel the re-attendance of another merely because the other party has complied with an undertaking or provided an answer after a discovery. However, I reject the suggestion that in Central Guaranty Trust Co. v. Beebe Estate Master Beaudoin was propounding a general requirement that affidavit evidence is required before an order for re-attendance will be made. Indeed, Master Beaudoin expressly limited the scope of his suggestion when he said affidavit evidence would be helpful "In this instance". None of the other cases cited by the Appellant support such a general rule and counsel for the Appellant was unable to cite any cases where Central Guaranty Trust Co. v. Beebe Estate was interpreted to this effect. Indeed, the proper approach to the ordering of re-attendance was clearly identified by McNeely, J. in Christie Corporation v. Alvarez where he said at paragraph 4, "no general rules are possible and each case must be considered on its merits." In this case, after the completion of discoveries, the Appellant provided answers to ninety nine undertakings and twenty refusals. The decision to order re-attendance was a discretionary one and, applying the proper standard of review, it cannot be said that Master Albert was clearly wrong.

[14] As a result, the Master's order is upheld and the Appellant is ordered to re-attend for discovery arising from the answers to the undertakings and refusals.

Labels: information breaches, litigation