All About Information

The Supreme Court of Canada issued its decision in Blood Tribe earlier today. In a judgement written by Mr. Justice Binnie, it unanimously held that the Privacy Commissioner of Canada does not have the power to compel production of records over which an organization claims solicitor-client privilege. In doing so, the Court affirmed the well-established principle that solicitor-client privilege cannot be abrogated by inference and made its first comments yet on the mandate granted to the PCC by the Personal Information and Protection of Documents Act.

The dispute arose when the respondent to an access to personal information complaint refused to produce records of communications that it claimed to be subject to solicitor-client privilege. In demanding the records be produced, the Commissioner relied on the investigatory powers granted by section 12. Section 12 reads as follows:

12. (1) The Commissioner shall conduct an investigation in respect of a complaint and, for that purpose, may

(a) summon and enforce the appearance of persons before the Commissioner and compel them to give oral or written evidence on oath and to produce any records and things that the Commissioner considers necessary to investigate the complaint, in the same manner and to the same extent as a superior court of record

The Supreme Court held that this provision does not give the PCC the power to compel production of records over which solicitor-client is claimed by mere inference or by necessarily implication in light of the PCC’s mandate.

While the principle that solicitor-client privilege can only be abrogated by express statutory language is not new, the Court’s application of the principle in this case demonstrates its strength because (as pointed out by the Information Commissioner in support of the PCC’s appeal), “verification of the privilege is the very object of the Privacy Commissioner’s statutory ombudsperson function and not merely a preliminary step to determine the record’s use for another purpose.”

The Court was not convinced by this argument, especially given the PCC’s mandate, which it characterized as adversarial rather than independent. Though the Court acknowledged that the validity of a solicitor-client privilege claim which is raised in response to a PIPEDA right of access request is of concern to the PCC given her mandate, it said her only valid means of seeking a determination of such a claim is to engage the Federal Court as she is empowered to do under the Act.

Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44.

On April 17th, the Federal Court of Appeal rejected an application for a stay of an order that requires eBay to provide the Minister of National Revenue with the names, basic account information and gross annual sales of eBay’s Canadian resident “PowerSellers” for 2004 and 2005.

The information was ordered to be produced under the authority of section 231.2 of the Income Tax Act, which authorizes third-party production orders that allow the MNR to seek information about persons or ascertainable groups of persons where the order is made to verify compliance with the ITA.  After last November when the Federal Court of Appeal held in Greater Montreal Real Estate Board that this provision did not require the MNR to establish that each and every one of the individuals targeted to be the subject of a “genuine and serious inquiry,” Hughes J. of the Federal Court affirmed the eBay production order.

The Federal Court of Appeal rejected eBay’s motion for a stay of Hughes J.’s order pending its appeal based on an application of the R.J.R.-MacDonald three-part test.  Sharlow J.’s key finding was that eBay did not prove irreparable harm. Although she acknowledged that information cannot be undisclosed, she held that harm to individual eBay account holders rather than eBay itself could not justify a stay.  This somewhat remarkable finding was despite “some material” on the record about eBay’s contractual relationship to account holders.

The record contains some material from which it could be inferred that eBay Canada has contractual obligations to eBay Inc. not to disclose certain confidential information without the consent of eBay Inc. It is not clear that the information sought by the Minister about PowerSellers is confidential information as contemplated in those contracts. Even if the information about PowerSellers is confidential information under those contracts, it is not clear that eBay Canada’s obligation not to disclose confidential information would or could be breached by the disclosure of information pursuant to a court order (even a court order that is under appeal). And, even if such a breach would or could result from such a disclosure, there is no evidence that any harm would come to eBay Canada as a result.

Coincidentally, the application for leave to appeal to the Supreme Court of Canada in Greater Montreal Real Estate Board was just dismissed on April 24th.

eBay Canada Limited v. Canada (National Revenue), 2008 FCA 141 (CanLII).

Yesterday, the Supreme Court of Canada unanimously held that the Criminal Code’s production order scheme does not allow a court to order that the police compensate a third party for the costs of compliance with a production order.

In 2004, the federal government passed Bill C-45, An Act to Amend the Criminal Code (capital markets fraud and evidence gathering). The Act created a new investigative tool called a “production order” by which third-parties may be required to produce documents, produce data or even prepare documents (based on existing data) for production. A production order is meant to be an easier-to-administer alterative to search warrants. The Department of Justice backgrounder on the Bill also says production orders are privacy-protective because they do not involve the fishing that’s associated with the execution of a search warrant.

The Court held that costs could not be ordered based on a reading of the statutory text in light of the relevant legislative history and the recognized social duty of citizens to assist in the administration of justice. It noted that the Department of Justice and the telecommunications industry had a dialogue before Bill C-45 was promulgated in which industry members requested an express jurisdiction to order costs.

The Court also held that standard for am exemption based on “unreasonable” burden should not be altered by establishing alternative criteria such as “undue hardship.” It held that reasonableness in the entire circumstances was a justiciable standard, noting that parties who are subject to frequent production orders may raise this fact as a relevant circumstance.

Tele-Mobile Company v. Ontario, 2008 SCC 12.

The Globe and Mail’s Law Page from this morning covers a January 31 decision of the Federal Court in which Madam Justice McTavish set aside a production order obtained by the Commissioner of Competition. She held the Commissioner, who obtained the order under section 11 of the Competition Act by way of an ex parte application, did not make a full and frank disclosure of material facts and made statements that bordered on misrepresentations.

There were three specific bases for McTavish J.’s decision. First, she held that the Commissioner ought to have disclosed a statement it had made in a previous section 11 application that the order obtained on that application would likely be sufficient for its inquiry-related purposes. Second, she held that the Commissioner provided “misleading, inaccurate and incomplete” information on the extent of the overlap between the information it sought and information it already had. Third, she held that the Commissioner ought to have drawn the concerns brought to her attention by the respondent earlier in the year in response to a previous and similarly-broad production order in the same inquiry. Most notably, the respondent had complained that the previous order was so burdensome that its process of retrieving documents had caused its file server to crash and likely involved data restoration costs exceeding $500,000.

The decision stresses the strict burden of disclosure on parties seeking ex parte orders for production, whether in the regulatory or civil context. The part about disclosing expressed concerns about the burden of retrieving electronic documents may apply in a limited number of situations because an ex parte process often starts the course of inquiry or investigation, but it is nonetheless significant given the broader challenges associated with managing the retrieval and production of electronic documents.

The Globe also has commentary by Davies Ward lawyers John Bodrug and Anita Banicevic, linked here. This is part of a recent run of cases on transgressions by regulators related to the seizure of documents. See, for example, my coverage of the Nova Scotia Appeal’s recent decision on a Canada Revenue Agency search here and the Ontario Superior Court of Justice’s December 2007 decision on a Ministry of Labour search here. (Full reasons are still pending in the latter case.)

The Commissioner of Competition v. Labatt Brewing Company Limited, 2008 FC 59.

On January 18, the Nova Scotia Court of Appeal issued a significant judgement on Crown liability for costs on an application to quash a search warrant.

The Court held that the Crown in Right of Canada ought not to be liable for costs of on an application to quash an “ill-conceived and poorly executed” search warrant obtained and executed by the Canada Revenue Agency. It reached this conclusion because a Crown Attorney was not involved in the impugned investigation but, rather, had simply responded to the application to quash.

The Court also said that it did not matter the CRA is a deemed agent of the Crown under the Canada Revenue Agency Act because the basis for an award of costs is rooted in the special role of the Crown as prosecutor:

The basis of this general rule is not that the prosecutor might be an agent of the Crown and that an investigator might not be. The general rule is not based on the law of agency, but on strong reasons of public policy which I have already described, and which have been set out in the cases on many occasions: see, for example, Foster, supra at ¶ 62-65; and Ciarniello, supra, at ¶ 31-36. Whether by virtue of ss. 4(2) of the CRAA, the investigator here was or was not an agent of the Crown (a point I need not decide) does not change the general legal principle applicable to costs against the Crown in criminal matters.

The underlying facts involved a search based on a flawed Information and in which the CRA had seized records subject to solicitor-client privilege contained on computer and electronic storage devices.

R. v. Taylor, 2008 NSCA 5.

Yesterday, the British Columbia Court of Appeal held that it ought not relieve B.C. Ferries from a confidentiality agreement it had entered into with the Canadian Transportation Investigation and Safety Board as a condition of receiving data from its own hard drive that had been recovered from its sunken vessel and seized by the Board.  So it could respond to the Board’s draft investigation report on the sinking, B.C. Ferries agreed to the following confidentiality covenant:

The [data] will be kept in confidence by BC Ferries and is to be used only for the purposes of responding to the draft report subject to the parties’ agreement to permitted uses prior to the release of [the Board's] final report or order of the court.

B.C. Ferries argued that the Board did not exercise its discretion to grant relief from the confidentiality covenant in good faith.  The majority, in a fact-specific judgement written by Mr. Justice Lowry, held that the clause did not grant a discretion subject to an implicit good faith requirement, but rather, was simply an agreement “subject to further agreement.”  Mr. Justice Hall adopted the majority’s reasons and added that the public interest in the safety of the traveling public might have otherwise justified an order of relief, but that there was insufficient evidence of such an interest on the record.

British Columbia Ferry Services Inc. v. Canadian Transportation Accident Investigation and Safety Board, 2008 BCCA 40.
 
 

On December 11th, the Ontario Superior Court of Justice found the Ministry of Labour violated Booth Centennial Healthcare Linen Services’ section 8 Charter rights and ordered it to return electronic records seized under an extremely broad search warrant. Mr. Justice Corbett’s order states, “The search and seizure of electronic records in this case was grossly overbroad, in the circumstances. There was no evidence before me of the practicality of an on-site search for electronic records, an approach that, as a matter of common sense, ought to be possible in a case like this.” We expect supplementary reasons to be issued in January.

In 2004, the federal government passed Bill C-45, An Act to Amend the Criminal Code (capital markets fraud and evidence gathering). The Act is most known in my practice for creating criminal whistleblower protection, but it also created a new investigative tool called a “production order” by which third-parties may be required to produce documents, produce data or even prepare documents (based on existing data) for production. A production order is meant to be an easier-to-administer alterative to search warrants. The Department of Justice backgrounder on the Bill also says production orders are privacy-protective because they do not involve the fishing that’s associated with the execution of a search warrant.

In Telus Mobility, the basic issue is whether a third-party can seek reimbursement for the costs of complying with a production order. According to Julian Ho’s good summary at The Court, the Supreme Court of Canada will hear oral arguments on the case on December 13th. Julian’s detailed summary of the case is here.

The Supreme Court of Canada is scheduled to hear an appeal of Blood Tribe Department of Health v. Canada (Privacy Commissioner) on February 21, 2008.  The case will present an opportunity for the Court to comment on a principle it first articulated in 1982 in Descoteaux v. Mierzwinski - that laws authorizing interference with solicitor-client privilege must be interpreted restrictively.  Of perhaps greater interest, it will be the Court’s first opportunity to provide significant commentary on the Personal Information Protection and Electronic Documents Act.

The dispute arose when the respondent to a complaint alleging a failure to provide access to personal information refused to produce records of communications that it claimed to be subject to solicitor-client privilege.  In demanding the records be produced, the Commissioner relied on the investigatory powers granted by section 12 of PIPEDA, a broadly-worded provision which does not expressly grant the power to order the production of records over which solicitor-client privilege is claimed. 

Litigation ensued and the Federal Court held that the Commissioner had the power to order production.  It did so by applying a purposive analysis, stressing the Commissioner’s “central role in achieving the important objectives of the legislative scheme.”

The Federal Court of Appeal disagreed with the lower court’s approach, which it found to be inconsistent with the Mierzwinski strict interpretation principle and the concept of solicitor-client privilege as a substantive rule of law.  It stated:

In short, the reason express language is required to abrogate solicitor‑client privilege is because it is presumptively inviolate. The exception for solicitor‑client privilege in the PIPEDA is not what shelters privileged documents from disclosure. The law of privilege does that. The exception simply recognizes that privilege.

There are some finer points to the Federal Court of Appeal’s decision that may also catch the Supreme Court’s interest, including (1) whether the principles developed in interpreting the federal Privacy Act should be applied in interpreting PIPEDA and (2) what effect should be given to language authorizing the exercise of powers “to the same manner and to the same extent as a superior court.”

Blood Tribe is likely to remain relevant given that Parliament’s Standing Committee on Access to Information, Privacy and Ethics made a rather moderate recommendation in its recent Statutory Review of the Personal Information and Electronic Documents Act.  Asked by the Privacy Commissioner to address the gap to her investigatory powers identified by the Federal Court of Appeal in Blood Tribe, the Standing Committee only recommended that PIPEDA be amended to expressly permit her to apply to the Federal Court for an expedited review of solicitor-client privilege claims. 

The Federal Court rejected an application to vacate a production order made under section 231.2 of the Income Tax Act. The order required two Canadian eBay subsidiaries to produce data about specific Canadian eBay users that resided on servers operated by eBay’s American subsidiary in the United States.

The Court dealt only with the issue of whether it had jurisdiction to order production of non-resident data because the parties agreed that the Court should reserve on whether there was a sufficient basis for the order pending resolution of the appeal in Canada (MNR) v. The Greater Montreal Real Estate Board, 2006 FC 1069 (CanLII). On the threshold issue, the Court stated:

In the present case, eBay Canada has access to and uses information respecting PowerSellers. It is not determinative of the issue that the electronic apparatus storing the information which eBay Canada accesses is outside Canada. The information can be summoned up in Canada and for the usual business purposes of eBay Canada. The situation may be different if the information never had been used in Canada.

For commentary by Michael Geist, please click here.

eBay Canada Limited v. Canada (National Revenue), 2007 FC 930 (CanLII).