2007 BCCA 439 Jampolsky Shattler

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:	*Jampolsky v. Shattler,*
	2007 BCCA 439

Date: 20070910

Docket: CA034991; CA034992

Docket: CA034991

Between:

Perry Jampolsky

Appellant

(Plaintiff)

And

Cindy Salina Shattler, Robert A. Smithson, and Insurance Corporation of British Columbia

Respondents

(Defendants)

AND:

David N. Robinson, Mary Anne Kaardal, David G. Baker, Insurance Corporation of British Columbia, Kayam Javer, and Paul Taylor

Respondents

- and -

Docket: CA034992

Between:

Zara Sovani

Appellant

(Plaintiff)

And

Joanna Sulinska and Urszula Sulinska

Respondents

(Defendants)

AND:

Lindsay C. Morphy, Sharon Butler, Patrice Abrioux, Insurance Corporation of British Columbia, John Dicesare, and Paul Taylor

Respondents

Before:	The Honourable Mr. Justice Chiasson
	(In Chambers)

R. D. Gibbens	Counsel for the Appellants
D.A. Brindle, Q.C.	Counsel for the Respondents
Place and Date of Hearing:	Vancouver, British Columbia
31 May 2007
Place and Date of Judgment:	Vancouver, British Columbia
10 September 2007

Reasons for Judgment of the Honourable Mr. Justice Chiasson:

Background

[1] These are applications for leave to appeal from the dismissal of parallel applications for contempt of court brought in two related actions arising out of the disclosure to non-parties of information obtained in the discovery process as a result of applications brought in the actions.

[2] Both actions are tort claims arising from motor vehicle accidents. The defendants are represented by the Insurance Corporation of British Columbia (“ICBC”). In Sovani, ICBC applied to obtain documents from educational institutions the plaintiff had attended and from her former employer. In Jampolsky, ICBC sought orders that the plaintiff submit to an independent medical examination, for the production of a medical claims history, prescription information and clinical records from seven doctors and the examination of the plaintiff’s mother and former girlfriend. The applications, which were served on the third parties, were supported by affidavits with either synopsised or exhibited information obtained by ICBC through the discovery process.

[3] The parties named in the contempt proceedings are defendants and third-parties in the actions, their lawyers, the affiants of the affidavits and the commissioners who took their oaths.

[4] ICBC has dealt with the disclosure of such information in court application in a Manual. The Chambers judge, E.R.A. Edwards, referred to the Manual in paras. 26–28 as follows:

[26] The portion of the Manual on which the plaintiffs rely in support of these applications states:

8.3.2. Rule 26 Applications: Documents and Privacy

Counsel should exercise care when preparing Rule 26(10) and (11) applications to obtain records from non-parties, such as employers and physicians. In many instances, counsel prepares one Notice of Motion in support of an application to obtain records from both employers and physicians and attaches all relevant records as exhibits even though each recipient might only have needed to see some of the records.

In order to protect the plaintiff’s privacy in these situations, counsel should consider the following recommendations when preparing Rule 26(10) and (11) applications:

§ Prepare one Notice of Motion and affidavit in support for each type of source (i.e., employers and health practitioners). This should be sufficient, in most cases, to ensure the plaintiff’s privacy. However, counsel should be aware that there may be rare occasions when the sensitivity of the information contained in the affidavit or exhibits dictates that separate applications within the same type of source be brought. Ideally all such related applications should be heard at the same time.

§ Critically evaluate the issues with which the particular application will be concerned and draft particularized affidavits including only those relevant facts and documents necessary to sustain that application.

§ Keep in mind that the documents being considered for use as exhibits may contain private and sensitive information; such documents or information should not be included as exhibits, referenced or disseminated, unless they are absolutely necessary to sustain the application.

[27] These guidelines were commented on by the Information and Privacy Commissioner as quoted in a Memo from Kari D. Boyle, ICBC Special Counsel, to “All Outside Defence Counsel” dated July 15, 1996, as follows:

In our mailing dated April 21, 1996 we set out recommendations to defence counsel to consider when preparing Rule 26 applications for documents. Enclosed is a copy of a memorandum issued by the Information & Privacy Commissioner entitled “Privacy of Personal Information in the Civil Litigation Process: Rule 26 Applications and the Insurance Corporation of British Columbia” which incorporates the text of our recommendations. The Commissioner has referred to these recommendations in response to complaints made by litigants as follows:

“…I mentioned that other complainants have approached the Office of the Information and Privacy Commissioner to complain about records collection and disclosure practices in litigation proceedings that may invade personal privacy. ICBC Special Counsel recently instructed all outside defence counsel to take reasonable steps to minimize the invasion of privacy when preparing and mailing sensitive personal information in the form of Notices of Motion and affidavits.

The … guidelines indicate that ICBC is aware of the need to protect personal privacy, even in the litigation process which traditionally has been privacy unfriendly. The Office of the Information and Privacy Commissioner recognizes that privacy invasions will occur during litigation involving public bodies. However, public bodies must take every reasonable step to minimize the invasions of privacy.”

[28] From this I infer that s. 8.3.2 of the Manual was developed by ICBC to respond to concerns expressed by the Information and Privacy Commissioner about the disclosure of information obtained through the litigation discovery process to non parties from whom further information is sought by counsel acting on behalf of parties insured by ICBC.

[5] In paras. 23 and 25 the judge summarized the positions of the parties:

[23] The position of the plaintiffs is that disclosure of the fruits of discovery to non parties to litigation in court applications for discovery of non parties should be circumscribed in accordance with the Manual, that the respondents failed to do so in these cases and that failure to do so is a breach of the implied undertaking of confidentiality which attaches to such information and a contempt of court by those persons in the defendants’ lawyers’ firms responsible for preparing and serving the applications for non party discovery.

. . .

[25] The position of the respondents is that the implied undertaking that the fruits of discovery will be held in confidence only precludes disclosure for a purpose outside the litigation in which the information has been obtained, and since in these cases disclosure to non parties was for a legitimate litigation purpose there was no breach of the implied undertaking.

[6] The judge concluded that “[t]he effect of the plaintiffs’ submission is to invite the court to expand the scope of the implied undertaking to comprehend the policy as stated in s. 8.3.2. of the Manual”. (Para. 41.) He declined to do so.

Chambers judgment

[7] In para. 29, the judge began his analysis by referring to this Court’s decision in Hunt v. Atlas Turner Inc. (1995), 4 B.C.L.R. (3d) 110. He quoted from para. 64 of the decision, which articulated an implied undertaking not to use discovered documents “other than in proceedings in which they are produced”. It is common ground that the undertaking has been extended to all information obtained on discovery. The judge continued in para. 30:

[30] Respondents’ counsel forcefully made the point that no case imposes any limitation based on the implied undertaking of confidentiality on the use which may be made of information disclosed through discovery in the litigation in which that information is obtained. I accept that as a correct statement of the law in British Columbia.

[8] The judge made reference to privacy legislation and to the fact that Ontario has codified the law concerning the use of discovery information. In paras. 43–47 and 49–51 he stated:

[43] The implied undertaking applies to all litigants, not just those insured and represented by ICBC. It is not self-evident that the policy adopted by a public body, ICBC, in response to FIPA should determine or inform the common law as developed by the courts in respect of the scope of the implied undertaking.

[44] It is a matter of judgment to be exercised by counsel what information obtained by parties through the litigation discovery process needs to be disclosed to non parties in furtherance of the litigation in which that information has been obtained.

[45] Any court-imposed constraint on that judgment is antithetical to the underlying rationale of court compelled disclosure, with its necessary intrusion on a litigant’s general right to privacy. That rationale is the need to do justice between the parties.

[46] Implicit in the law and Rules governing disclosure is the proposition that justice between the parties is best assured when disclosure of all relevant evidence from whatever source may be compelled by the court, subject to claims of privilege.

[47] Imposition of constraints on the parties’ use of information obtained through the discovery process in the litigation in which it is obtained, by expanding the scope of the implied undertaking, could inhibit counsel in their investigation of the case and undermine the rationale for court compelled disclosure.

…

[49] The law delineating the scope of the implied undertaking of confidentiality respecting use of information obtained through the litigation discovery process draws a bright line. Use of that information within the litigation is permitted use. Use outside the litigation for an “alien” or “collateral” purpose is not permitted without the consent of the affected party or an order of the court.

[50] That bright line tends to expedite litigation, which is the goal of all recent reforms of civil litigation procedure in various jurisdictions. An obscure line would tend to promote procedural controversy, which is antithetical to that goal. The current bright line sacrifices litigants’ privacy for more procedural certainty. Its ultimate goal is to achieve a just result in the litigation.

[51] The plaintiffs’ applications seek to have the court impose the policy reflected in s. 8.3.2 of the Manual as a constraint on the use of information obtained through the litigation discovery process within the litigation. If the court were to impose that policy by expanding the scope of the implied undertaking of confidentiality to limit use of information obtained through the litigation discovery process within the litigation in which it was obtained, the bright line would become an obscure line. There is no precedent for imposing such a policy. For the reasons stated, I decline to do so.

Positions of the parties

[9] The applicants assert that the judge made two errors: one, “. . . finding there are no limits on the use of discovery material (other than it being used ‘within the action’)”; and two, concluding that “[t]he Court has no ability to interfere with the conduct of counsel in such matters”. They say that the issue is one of general importance to the practice of law and that although in this case the information has been delivered to non-parties, the appeal is not moot because the actions continue and further disclosure of such information can be avoided.

[10] The respondents contend that the appeal has no merit because the law is settled. For the same reason they assert that the appeal is not significant to the practice. They say that none of the respondents is a party to the action except ICBC and that the information could be obtained by other appropriate applications under the Rules. Finally, they state that progress of the actions would be impeded if there were an appeal.

Discussion

[11] The respondents refer to the four factors relevant to granting leave to appeal as stated in Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd., 2006 BCCA 373, [2006] B.C.J. No. 1855; at para. 13:

(i) whether the point on appeal is of significance to the practice;

(ii) whether the point raised is of significance to the action itself;

(iii) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and

(iv) whether the appeal will unduly hinder the progress of the Action.

[12] I begin with a consideration of the merits of the appeal.

[13] The applicants assert that the statement in Hunt – “other than in the proceedings in which they are produced” – is not unlimited. It is contended that even “within the action” discovery information must not be for a collateral or improper purpose. Reference is made to Hunt and to Devron-Hercules Inc. v. Gill, [1987] B.C.J. No. 1618 (Leggatt L.J.S.C).

[14] At the core of the five-judge division’s decision in Hunt is the requirement that discovery information be used only for a “proper purpose”. In Devron-Hercules the plaintiff applied for the production of documents in a patent infringement and improper competition action. The court was concerned with the documents being used to defeat proper competition. I do not consider either of these cases to be contrary to the approach taken by the trial judge in this case.

[15] It is important to remember the issue before the judge. He was being asked to import into the implied obligation the policy of ICBC as stated in its Manual. He relied on the clear language of Hunt in declining to do so. That language is found repeatedly throughout Hunt and the many cases referred to in that case. Hunt itself has been referred to in at least three cases by this court and in all of them reference is made to the words “in connection with the litigation in which they were produced”. (Edgeworth Construction Ltd. v. Thurber Consultants Ltd., [1996] B.C.J. No. 69 (S.C.), para. 13; Doucette v. Wee Watch Day Care Systems Inc. [2006] B.C.J. No. 1176 (C.A.), para. 56; Xu v. Foo, 2006BCCA 525, [2006] B.C.J. No. 3009, para. 57.)

[16] In my view, a division of this Court is unlikely to conclude that the trial judge erred in applying the clear language of Hunt in the circumstances of this case.

[17] I hold the same view concerning the alleged second error of the trial judge.

[18] The applicants refer to the comments of the judge in paras. 44 and 45 and assert: “[i]t is error for the Learned Chambers judge to abrogate the Court’s duty to draw its own conclusions”. Reference is made to Crabbe v. Shields Estate, [1925] B.C.J. No. 102 (C.A.) and Say v. McCarthy, [2003] B.C.J. No. 2802 (S.C.). Neither case is of assistance. Both involve the consideration of evidence and the obligation of the court to make a decision on the evidence.

[19] As noted, in paras. 45 and 46 the judge stated:

[20] I do not read the judge’s comments as abrogating his duty. He recognized the task of counsel to prepare material that is considered necessary to obtain an order of the court such as those sought in this case. He merely declined to graft onto that task an obligation to adhere to the policy of ICBC as stated in its Manual. His approach was consonant with the caution expressed by this Court in para. 65 of Hunt: “. . . the obligation should not be construed rigidly . . . the obligation the law imposes is one of confidentiality from improper publication. It does not supersede all other legal, social or moral duties”.

[21] I agree with the contention of the respondents that this issue is not one of significance to the practice. The language of Hunt is clear and has been followed in practice since 1995. Parties are constrained by the obligation not to use discovery information for an improper purpose. There is nothing in the jurisprudence provided to me that suggests that the words “in the proceedings in which they are produced” should be limited additionally in the manner proposed by the applicants. In my view, a division of this Court is unlikely to conclude that the Chambers judge erred by refusing to do so.

[22] The applications for leave to appeal are dismissed.

“The Honourable Mr. Justice Chiasson”