Smith, Kline & French Laboratories Ltd. v. A.G. (Can.), 89 DTC 5205, [1989] 2 CTC 63 (FCTD)

MacKay, J.: —This was an application by the Attorney General of Canada, on behalf of the Minister of National Revenue for an order permitting officers of the Department of National Revenue to inspect and obtain photocopies of certain exhibits which were ordered by this Court and by the Court of Appeal to be sealed as confidential in the course of trial and appeals in the original action between the same parties.

In the action, initiated by the plaintiffs in 1980, the Attorney General of Canada, as defendant, contested the claim of the plaintiffs to a declaration that subsection 41(4) of the Patent Act (now subsection 39(4) of that Act, R.S.C. 1985, c. P-4) was invalid. That section provides for compulsory licensing by the Commissioner of Patents, upon application, of patents relating to the process for production of medicines, the basis of authority for lawful production of so-called "generic drugs" by others than the patent owner or those licensed by the owner. The individual plantiffs in the action were the inventors of two inventions which formed the process for production of a medicine known generically as cimetidine. They were employees of and had assigned their rights in the inventions to Smith, Kline & French Laboratories Limited, a United Kingdom company, which owns the Canadian patents for these processes. Smith, Kline & French Canada Ltd. is a Canadian company licensed by the patent owners to sell the medicine in Canada which it does under the name Tagamet as a prescription drug. Both of the companies are parts of a larger corporate enterprise, both being wholly-owned subsidiaries of a United States company which in turn is a subsidiary of another United States company. At the time action was commenced by the plaintiffs, cimetidine was the subject of a number of compulsory licenses issued to others in Canada pursuant to then subsection 41(4) of the Patent Act.

In the original action the plaintiffs sought a declaration that this provision of the Patent Act was invalid, as ultra vires the legislative authority of Parliament, as contrary to the Canadian Bill of Rights, and as in violation of the Canadian Charter of Rights and Freedoms. At trial Strayer, J. dismissed the plaintiffs’ action [1986] 1 F.C. 274; 24 D.L.R. (4th) 321). That decision was upheld on appeal by the plaintiffs to the Federal Court of Appeal ([1987] 2 F.C. 359 (C.A.)), and leave to appeal to the Supreme Court of Canada, sought by the plaintiffs, was refused ([1987] 1 S.C.R. p. xiv, application refused 9.4.87).

It might have been considered that that was the end of the matter. Now, however, the Attorney General of Canada, defendant in the original action as defender of the general federal public interest, makes application pursuant to Rules 201 and 319 of the Federal Court for access to documents sealed as confidential by orders of the court, on behalf of the Minister of National Revenue, who was not a party and who had no particular interest to be represented in the original action.

The reason for this unusual application is that the Minister of National Revenue is conducting an audit of the returns of one of the original plaintiffs, Smith, Kline & French Canada Ltd., for the taxation years 1981, 1982 and 1983. In the course of that audit, which the Minister has authority and responsibility to undertake (Income Tax Act, R.S.C. 1952, c. 148, subsections 69(2), 152(1), 152(4) and 152(7), as amended by S.C. 1970-71-72, c. 63, s. 1), auditors are concerned to examine any information that might relate to prices paid by that plaintiff for cimetidine purchased from non-arms length non-resident suppliers. In February 1988 auditors on behalf of the Minister of National Revenue wrote to the Canadian corporate plaintiff requesting consent to release of the exhibits now in issue or of the information contained in them but the company declined to consent.

Thereafter, in August 1988 this application was initiated. It is opposed by the plaintiffs, respondents in this matter, on several grounds. Before turning to argument some further review of the history of this action with reference to the exhibits sealed as confidential is essential.

The Action—Pre-trial

In the course of discovery before trial there were certain undertakings by counsel for the Attorney General in relation to confidentiality of testimony or documents produced on discovery in the case of at least one of the individual plaintiffs and of one or more of the officers representing one or both of the corporate plaintiffs. From the transcript of discoveries the undertakings appear to be broad in their scope.

In discovery of one of the individual plaintiffs counsel for the plaintiffs placed on record that:

. . . there is an undertaking as to confidentiality between us, and that is that the documents and information that are discussed and come forward during this examination are to be kept confidential. We would want the transcript sealed, that is, not to be used. Information is not to go to anyone who is not working directly on the case and only used for the purposes of the action, the same nature of the undertaking.

Then counsel for the defendant, the Attorney General of Canada, responded:

I can certainly . . . give you an undertaking that the information given on this discovery, either orally or in the form of documents, will not be passed on to people outside the Justice Department or Consumer and Corporate Affairs, in particular, the Patent Office, and will not be used by the defendant for purposes unrelated to this action.

Following this there was a further exchange between counsel:

(For the plaintiffs): When you are discussing the information with other than the legal profession involved in the action, the restraint that the information is confidential and is not to go beyond them would be passed on to such people so that they would be aware of it.

(For the Defendant): Yes I will undertake to do that as well.

In discovery of one of the officers of the English corporate plaintiff counsel for the plaintiffs placed on record the undertaking as to confidence made in the earlier discovery and asked that it apply as well to this further discovery and counsel for the defendant acknowledged that the same undertaking as to confidentiality would apply to the evidence whether oral or written.

There was one other exchange in discovery of one of the individual defendants where, after the witness declined to answer on the basis that the information was confidential, counsel for the parties engaged in the following exchange:

(For the Defendant): I must ask that you [reveal the information] because, of course, there isn't any special privilege attaching to that kind of information.

(For the Plaintiffs): I would think that would be highly confidential information, highly pertinent to competitors to know whether or not facilities are being expanded, cut back or maintained to the status quo. You made your request of record, and we will take it under consideration.

(For the Defendant): I appreciate it might well be confidential, and I thought that was why you extracted an undertaking from me before we proceeded.

(For the Plaintiffs): There are certain aspects where information will be contained in documents that you will be seeing.

(For the Defendants): You and I know . . .

(For the Plaintiffs): There is no need to expand the risk by contributing to it beyond what is necessary.

(For the Defendant) : This is my opportunity to examine [the individual plaintiff] on the subject, and he does seem to have personal knowledge of the subject. I am asking him now to tell me what he knows about it.

In this application this last exchange is relied upon by the applicant for the conclusion, based on the recollection and belief of one of the original counsel for the defendant in the action, that the reason advanced by the plaintiffs for seeking undertakings about confidentiality of evidence in discovery, and for subsequent correspondent, referred to below, was concern for confidentiality vis-a-vis competitors in the industry.

Subsequently, in recognition of the undertakings, counsel for the defendant advised in writing that he anticipated a need for assistance of others to whom it might be necessary to show exhibits regarded by the plaintiffs as confidential and he undertook to ensure that "anyone with whom I discuss the matter is aware of the undertaking I have given to the need to keep the information in strict confidence". Counsel later advised in writing that he proposed to convey information, provided in confidence on discovery of an officer of the Canadian corporate plaintiff, to the Minister of Consumer and Corporate Affairs, and by inference I assume sought to extend the umbrella for conveying information acknowledged to have been provided in confidence.

In argument in relation to this application counsel for the plaintiffs submitted that the Court could not relieve counsel of their obligations assumed by pre-trial undertakings, a submission with which I agree but one that, in my view, is not directly germane to the application.

At a later stage in pre-trial proceedings, the defendant sought certain documents from the corporate plaintiffs, referred to in discovery of officers of the companies, apparently including certain financial information. The application for production of the documents in question was refused by Strayer, J., (1985) 1 C.P.R. (3d) 268 (F.C.T.D.). Thereafter, the Court of Appeal ordered that the documents sought, having already been produced and marked in discovery, be produced "subject to such measures to protect their confidentiality as the parties may agree or, failing agreement, the Trial Division may order", (per Mahoney, J. for the Court, unreported, F.C.A. A-957-84, 11 January 1985).

The Action-"Confidentiality Orders"

Thereafter, by Order of the learned Associate Chief Justice, made February 14, 1985, pursuant to Rule 324 with the consent of counsel, provision was made for the documents to be produced and retained in confidence, including the following terms, after defining "confidential information” in terms of certain documents and "trial counsel" by naming then counsel for the Attorney General "or any other particular solicitor, employed by Deputy Minister of Justice, who has conduct of this action":

3. Each document of the confidential information shall be marked with a notice stating that the document is subject to this confidentiality order.

4. If used in Court, all confidential information shall be filed in sealed envelopes or other appropriate sealed containers on which shall be endorsed the caption of this litigation, an indication of the nautre of the contents of such sealed envelope or other container, the word “Confidential” and a statement substantially in the following form:

“This envelope is not to be opened nor the contents thereof to be displayed or revealed except by order of the Court or consent of the parties".

5. All confidential information shall be retained in the custody of trial counsel at their personal offices and shall not be used by trial counsel for any purpose other than in connection with this action subject to the provisions of this order and shall not be disclosed by trial counsel except that, and solely for the purpose of this action, any document or information may be disclosed by trial counsel to such persons, including outside experts, as trial counsel deems necessary. The confidential information may be delivered to the offices of such persons, subject to the provisions of this order.

6. Before any authorized confidential disclosure is made to a person as provided in para. 5, such person shall have acknowledged, in writing duly executed and returned to trial counsel, that he has read and understands the terms of this order and agrees to comply with and be bound by this order. At all times such person shall ensure that the confidential information is maintained in a secure place and is only shown to persons who have acknowledged this order in writing.

7. Trial counsel and such person to whom confidential information is disclosed pursuant to paras. 5 and 6 of this order shall not directly or indirectly disclose any confidential information or the subject matter or contents thereof to any other person, firm or corporation without further order of the Court, or the consent in writing of the plaintiffs.

8. Trial counsel and such person to whom confidential information is disclosed pursuant to paras. 5 and 6 of this order shall not use any confidential information or the contents or the subject matter thereof for any purpose other than in connection with this action subject to the provision of this order.

9. Upon final termination of this litigation, the defendant and each other person subject to the terms hereof shall be under an obligation to assemble and return to the plaintiffs all confidential information and all copies thereof.

10. Nothing in this order nor anything done in compliance with this order constitutes any waiver by the plaintiffs as to the confidentiality of any information or document subject hereto.

When the matter came on for trial, counsel for the plaintiffs after a brief opening description of the case to be presented referred to the matters in confidence in the following terms, as recorded in the transcript:

. . . there is a protective order in this case, and the protective order is particularly applicable to the dollars and cents aspect of the case. My learned friend and I both agree that the protective order should apply to the trial as well as to the pre-trial proceedings.

It may be that if and when we come to that matter of sensitivity, we may ask your Lordship to hear that part of the evidence in camera. I take it my learned friend is in accord with that proposition.

Counsel for the defendant acknowledged he had no objection to that and the learned trial judge agreed that this was in order. On this basis the trial proceeded, some testimony was heard in camera and documents subject to the order of February 14, 1985 continued throughout to be treated as sealed in confidence and some other documents, including two here sought, were sealed as confidential in the course of the trial.

Following trial, in proceeding to appeal, the plaintiffs’ counsel applied for and was granted, with consent of counsel for the defendant, pursuant to Rule 324, an order maintaining and extending the earlier order of February 14, 1985 in the following terms, (from FCA 909-85, Order granted by Heald, J., August 25, 1986):

(1) That the terms of the Order (hereinafter "the Confidentiality Order”), made in this matter by the Honourable Associate Chief Justice on the 14th day of February 1985, shall continue to apply during the course of this appeal to each of the documents mentioned in that Order;

(2) That the portion of the Appeal Case herein that consists of evidence given in camera before Mr. Justice Strayer at the trial of this action or of confidential documents admitted in evidence at the said trial, namely, the volumes marked Confidential Volume I, Confidential Volume 11, Confidential Volume Ill, Confidential Volume IV, Confidential Volume V, and Confidential Volume VI of the Appeal Case (hereinafter the "Confidential Appeal Case"), be sealed as confidential and not be opened or inspected by the public except by order of the Court or consent of the parties; and

(3) That the Respondent's Memorandum of Fact and Law, and any other document filed in this matter that refers to any document to which the Confidentiality Order applies or to any matter forming part of the Confidential Appeal Case, be marked confidential and sealed and not be opened or inspected by the public except by order of the Court or consent of the parties.

The exhibits to which the applicant now seeks access are subject to the “Confidentiality Orders" previously granted with consent of counsel for the defendant. All of the documents except two were documents that the plaintiffs were compelled by order of the Court of Appeal to produce subject to the terms of the "Confidentiality Order" of February 14, 1985. The two exceptions were a report of an expert witness for the defendant based on analysis of documents which the plaintiffs were ordered to produce and a transcript of excerpts of discovery evidence of an officer of the English corporate plaintiff in which undertakings had been given by the applicant herein that the information would be kept confidential and would not be used for purposes other than the action then underway. All of the documents in question had been sealed as confidential at trial and were subject to the “Confidentiality Order" issued by the Court of Appeal on August 25, 1986.

The applicant now seeks an order for a representative of the Minister of National Revenue to have access to these documents relying upon several grounds, a motion opposed by the respondents.

The Principle of Openness of Court Records

It is urged that the principle of openness of court records supports the application. Reference is made to Rule 201 of the Federal Court Rules and to the common law.

Rule 201 provides for maintenance of Court files and records and provides in part that:

(4) Any person may, subject to appropriate supervision, and when the facilities of the Court permit without interfering with the ordinary work of the Court,

(a) inspect any court file or the annex thereto; and

(b) upon payment. . . obtain a photocopy of any document on a Court file or the annex thereto.

That general rule is an important one, but it cannot be applicable without approval of the Court, which the applicant now seeks, where the Court itself has previously ordered certain exhibits to be maintained in confidence and so sealed.

In addition to the Rules it is urged that there is a common law presumption in support of public access to the courts and court records, and the burden of persuading the Court that access should not be provided is upon one who seeks to deny it: per Dickson, J., as he then was, for the majority in Attorney General of Nova Scotia v. McIntyre, [1982] 1 S.C.R. 175 at 189. In the course of his opinion Dickson, J. said at pp. 186-187:

In my view curtailment of public accessibility can only be justified where there is present the need to protect social values of superordinate importance . . .

McIntyre held that access should be provided for a member of the public to examine search warrants and supporting documents issued pursuant to section 443 of the Criminal Code, R.S.C. 1970, c. C-34, after the warrants had been executed. The applicant, in stressing the general principle of "openness" of court records also referred to Samuel Moore & Co. v. Commissioner of Patents, [1980] 2 F.C. 350; 45 C.P.R. (2d) 185 (F.C.A.) where then Chief Justice Jackett, in an appeal from a decision refusing a grant of a patent, refused a motion for sealing as confidential documents submitted in application for a patent. Further, reference was made to Atwal v. The Queen, [1988] 1 F.C. 107; 36 C.C.C. (3d) 161 (C.A.) where reliance on the principle led the Court of Appeal to overrule Heald, J. who had dismissed an application, by an accused in criminal proceedings, to rescind a warrant, or to provide access to documents supporting the warrant, where the warrant was issued under the Canadian Security Intelligence Service Act, S.C. 1984, c. 21.

The presumption of "openness" of court records is important and it is generally applicable in judicial proceedings. It would have been considered by counsel and by the Court at the time the orders now sought to be varied were issued with consent. In none of the cases referred to which turn on the general principle of openness were the decisions concerned with a situation where the information sought is confidential by order of the court itself, made with consent of the parties, and where one party subsequently applies for the order to be changed. In this application the social value of importance at issue is the integrity of the judicial process itself. We are not concerned with the interests of a member of the public, though the applicant in his representative capacity for all federal public interests now seeks access on behalf of a particular public interest not at issue in earlier proceedings. The principle supporting access by a member of the public is not directly supportive to one of the parties to an action who, having consented to orders for sealing documents as confidential, seeks access for purposes admittedly not considered at the time of the orders. In this case the burden of persuading the Court that access should be provided is clearly on the applicant who now seeks to have varied the orders to which he earlier consented.

Reasons Inferred for Ordering Documents be Maintained in Confidence

The applicant submits that the reason for the respondents seeking confidentiality, both as to undertakings between counsel and in relation to orders of this Court in advance of trial, at trial and in advance of appeal, was concern that disclosure would harm their interests by revealing matters the respondents considered confidential and sought to protect from disclosure to competitors. That submission is based, apparently, on the recollection and belief of one of counsel for the defendant in the original proceedings, with particular reference to the final exchange between counsel recorded above from discovery proceedings. It is also based upon the reason advanced by the Canadian corporate plaintiff in another case where it sought confidentiality in relation to evidence in moving for proceedings to be in camera (Smith Kline & French Canada Ltd. v. Frank W. Horner Inc. (1982), 6 D.L.R. (4th) 229; 70 C.P.R. (2d) 128 at 132 (F.C.T.D.)). The latter inference, drawn from another action, is irrelevant here.

The former inference based on recollection and belief is denied by counsel for the plaintiffs. It is not one that I can accept, based on the transcripts of discovery as a whole which have been brought to my attention. In one passage in the transcript from discovery of one of the parties the undertaking is clear that evidence would not be used by the applicant herein "for purposes unrelated to this action”, and that undertaking is specifically referred to in discovery of an officer of one of the corporate plaintiffs. Moreover, the subsequent conduct of counsel for the defendant implicitly acknowledged that information provided in discovery, with undertakings, was for the purpose of the action then underway when he wrote to advise that, in extending the umbrella of the undertaking as to confidence, he would alert any who were provided with information deemed confidential that it was to be kept confidential.

It may well be, as averred by one of original counsel for the defendant that throughout the proceedings he did not "hear discussed as a reason for maintaining the confidentiality of documents and information, the income tax liability of the plaintiff Smith, Kline & French Canada Ltd". Similarly, a host of other possible reasons for desiring confidentiality were not apparently discussed and it would be inappropriate to draw any inference from what was not discussed.

There is no clear evidence from transcripts of what reasons underlay the concern for and the giving of undertakings as to confidence, and it may be that there was no real meeting of the minds on the reasons. In any event there is no reason on the record in relation to the orders of the Trial Division or of the Court of Appeal and those orders provide in each case a complete ban on access, except for purposes of the proceedings then underway, unless the Court should otherwise order. In my view, in light of the terms of the orders, the reasons for which confidential undertakings and orders were sought and the reasons for which they were granted at various stages in proceedings between the parties are irrelevant to the issue raised by this application.

Other Considerations Not of Direct Relevance

Similarly, I am not persuaded that the following matters raised in argument are relevant to the issue herein.

(1) The applicant's submission that maintenance of confidentiality from competitors is irrelevant to the interests of the Minister of National Revenue in conducting an income tax audit seems itself to be irrelevant in light of my conclusion about reasons and the terms of the orders here in issue. Even if that conclusion is not shared this submission does not assist the applicant in seeking to have the Court now vary the terms of those orders. Confidentiality would be similarly irrelevant to many other interests that public officials or private persons might seek to pursue if given access to the information here sealed as confidential.

(2) The applicant's submissions that officers of Revenue Canada, Taxation are bound by the confidentiality provisions of section 241 of the Income Tax Act and further that the Court could impose directions limiting uses of the information sought if the application herein were granted, seem to me relevant only to the conditions upon which variation of the original orders might be ordered, not to the issue of whether the orders should now be changed.

A.M.P. of Canada, Ltd. v. The Queen, [1987] 1 C.T.C. 256; 87 D.T.C. 5157 (F.C.T.D.), relied upon by the applicant as an example of court imposed limitations on use of information, was a case where access was sought to financial information and tax returns of third parties, then in possession of the Minister of National Revenue not the Court, upon which the Minister had relied in reassessing tax liability of the applicant. One of the third parties objected to release of the information sought but the Crown did not contest the application. That case is not helpful in defining the grounds for varying court orders as to confidentiality. Moreover, section 241 of the Income Tax Act and further possible confidential orders of the Court would provide little comfort to the Canadian corporate respondent here for neither could provide protection from use of the information against itself, for that is the very purpose for which access is now sought, the use of the information in assessments that can only affect that respondent.

(3) The applicant’s suggestion in argument that it would be ironic if information provided in an action contesting the validity of litigation were now withheld in an application made to assist the Minister of National Revenue in the discharge of his responsibilities according to law seems to me irrelevant. Moreover, it overlooks the fact that the information sought was tendered as evidence in the original action by the applicant, not by the respondent who resisted production of documents until the Court ordered their production with provision for them to be maintained in confidence.

(4) Similarly, there seems to me no direct relevance to the issues here of the respondent's submissions that at common law there is an implied undertaking that evidence a party is compelled to produce on discovery will be used only for purposes of the action for which it is produced, and that this implied undertaking is enforceable by the Court.

Authorities cited for these propositions discuss the balancing of interests, on the one hand the public interest in open and expeditious judicial proceedings where all relevant information is available to the parties in order to ensure that justice be done between them, and on the other hand, the public and private interest in maintaining privacy in relation to information, oral or written. The former interest supports the process for discovery under which parties may be compelled to provide all information and documents available to them that are relevant to the issues in an action. The latter interest in maintenance of privacy supports the recognition of an implied undertaking by counsel and a party who gain access to information through discovery that it will not be used for any collateral or ulterior purpose and will only be used for purposes of the action for which it is produced. Others, not associated with the action for which information is produced on discovery, who acquire the information may be enjoined from using it for any purpose other than the action: Distillers Co. (Biochemicals) Ltd. v. Times Newspapers Ltd., [1975] 1 All E.R. 41 (Q.B.D.). The implied undertaking will preclude use of documents obtained in discovery in one private action from being used as the basis for another: Riddick v. Thames Board Mills Ltd., [1977] 1 Q.B. 881 (C.A.), though it may not preclude action for contempt for violation of an Anton Pillar order issued in an earlier related action between the parties if information obtained through a similar later order indicates violation of the first order: Crest Homes pic. v. Marks et al., [1987] 2 All E.R. 1074 (H.L.). The undertaking may be enforced even where documents obtained through discovery, having been read in open court, are later used for a collateral purpose: Home Office v. Harman, [1982] 1 All E.R. 532 (H.L.).

It is unnecessary to decide whether there is as yet widely recognized in Canadian courts an implied undertaking to the court, or a general obligation of counsel and parties, to use information obtained through discovery only for purposes of the action for which it is produced. It has been referred to in some Canadian decisions, including Lac Minerals Ltd. v. New Cinch Uranium Ltd. et al. (1985), 50 O.R. (2d) 260 (High Ct.), and Control Data Canada Ltd. v. Senstar Corporation (unreported, F.C. No. T-1583-84, May 6, 1988 per Giles, A.S.P., appeal dismissed by Jerome, A.C.J., June 6, 1988). We are here concerned not with recognition of implied undertakings and possible release from those. Rather we are concerned with orders of this Court and the Court of Appeal which sealed documents as confidential, thus reinforcing any express or implied undertakings as to use of the documents only for purposes of the action then underway between the parties, and whether these orders should now be varied.

Varying "Confidentiality Orders"

This Court has dealt with applications to vary its own “confidentiality orders" on previous occasions. In Halliburton Co. et al. v. Northstar Drillstem Ltd. et al. (1982), 65 C.P.R. (2d) 122, Walsh, J. refused to amend a confidentiality order so far as it related to information produced on discovery but did approve amending the order to permit disclosure of other confidential information to Alberta, but not for use as evidence in any action. In Algonquin Mercantile Corporation v. Dart Industries Canada Limited, (unreported, F.C. No. T-831-82, Nov. 4, 1983), McNair, J. declined to vary terms of a confidentiality order, issued on consent of the parties, to permit persons other than those designated in the order to have access to confidential information in order to provide advice. In Control Data Canada Ltd. v. Senstar Corporation, supra, Giles, A.S.P., refused to grant an order to permit disclosure of information provided on discovery and other information subject to a confidentiality order where the purpose of the application was to seek advice from counsel in the United States about possible legal action under legislation of that country which action, if successful, might result in triple damages, an outcome deemed penal in nature by the Associate Senior Prothonotary.

In Apotex Inc. v. Attorney-General of Canada et al. (1986), 10 C.P.R. (3d) 310; 5 F.T.R. 244, Madame Justice Reed declined to vary terms of a prior confidentiality order sought by one seeking to appeal an order rejecting its application to be added as an intervenor to proceedings. In dealing with the matter she did not accept the general principle of open judicial proceedings reflected in Rule 201(4) as sufficient ground for altering the original order sealing the court file as confidential. That factor would have been considered at the time of the original order sealing the court file as confidential. That factor would have been considered at the time of the original order. In her words:

Something more than an argument based on the general principle of the public nature of court proceedings must be given as a reason for altering the original order—some circumstances, or compelling reason not directly considered when the order was given.

Here the applicant submits that this test is met, that the changed circumstance is that the Minister of National Revenue is now trying to determine the plaintiff's correct income tax liability, a matter not considered at the time the orders were given. Further, it is submitted that enabling the Minister to review the information here sought in furtherance of his responsibilities under the Income Tax Act is a compelling reason for altering the orders.

In the audit initiated by the Minister the prices paid by the Canadian corporate respondent for cimetidine to non-arm's length non-resident sup- pliers are apparently under review. The applicant infers from the decision of Strayer, J. in the trial of the original action and from information provided by counsel for the applicant when the appeal was heard that the Canadian corporate respondent paid more than the international market price for the drug but I do not find in the reasons of Strayer, J. or in the Court's own record in prior proceedings any basis on which that inference can be more than speculation.

The respondents submit that these circumstances do not present a compelling reason for varying the order. They point to the absence of evidence by the applicant that the purposes sought by the Minister are not met by other information available to him now or through powers conferred by the Income Tax Act without seeking to vary the orders made to maintain confidentiality. They point as well to the fact that the information sought was ordered produced, or was based on such information, by respondents other than the Canadian corporate respondent whose tax liability is of concern to the Minister.

Conclusion

I am not persuaded that the test set out in Apotex has been met by the applicant. I accept that review of the tax liability of the Canadian corporate respondent was not considered at least in the court action at the time the “confidentiality orders" were made and in a sense this is a new circumstance. But it is not a change in circumstances in relation to the issues between the parties in the action for which the information was produced. It is a completely new circumstance and I am not persuaded that it is a compelling reason for variation of the orders, though I have no doubt that it would serve the convenience of the Minister of National Revenue to have access to the documents here sought, which is in the Court's records, sealed as confidential, as a result of the coincidence of the action lawfully begun by the respondents.

On principle, where the court has ordered, with consent of the parties, that documents be sealed in confidence in the interests of seeking justice in the issues between parties to an action, the reason for varying the orders should be truly compelling, especially where the purpose for access is unrelated in any way and is in that sense collateral or ulterior to the action in which the documents are filed and sealed. Only in truly exceptional cases would it be warranted to change a “confidentiality order" in these circumstances. Indeed, even in the absence of an order the Court might well preclude use or access to information arising from discovery for purposes of a collateral action because of an implied undertaking that this information is to be used only for purposes of the action in which it is produced: Riddick, supra. If it were otherwise, confidence in the integrity of the judicial process, including the responsibility of the court to protect the interests of the parties in litigation, would be eroded.

This is particularly the case, it seems to me, where the action in which “confidentiality orders" are granted involve the Attorney General as a party. The Attorney General has responsibilities to represent a vast array of public interests. If counsel for the Attorney General consents to an order that evidence be maintained in confidence, or if he is subject to such an order even without consent, that order should not be varied merely because there arises some other public interest, collateral to the action in which the order is made. Only the most exceptional reasons would warrant variation of the order. Otherwise, the interests of justice served by the modern discovery process would tend to be frustrated. Parties engaged in actions by or against the Crown would seek to avoid disclosure of information which might at some future date, regardless of the outcome of the original action, be sought for use by the Crown for some purpose unrelated to the original action. This might be the case particularly if information sealed as confidential in court records were to be made available to the Minister of National Revenue when he is engaged in reasssessing tax liability of any party who might have been involved in an action with the Crown.

That responsiblity of the Minister, assessing liability for tax, is an ongoing one, in no way dependant upon documents or other evidence provided in actions in this or any court. In this case that responsibility existed in relation to the Canadian corporate respondent before the original action was commenced, throughout the proceedings and it continues today. It is not a new responsibility even though it may be a new circumstance that a decision has apparently been made to conduct a special audit of that respondent's tax liability. This is not, it seems to me, a compelling reason to now vary the “Confidentiality Orders" made earlier in the action between the parties and with consent of the applicant.

Having reached this conclusion it is not necessary to consider whether this Court has authority to vary an order of the Court of Appeal, an issue which would only arise if it seemed appropriate to vary orders of the Trial Division, which, in my view, it is not in this case.

In the result, the application by the Attorney General of Canada is dismissed with costs to the respondents.

At the time of hearing an application was made by the respondents seeking enforcement of particular provisions in the “Confidentiality Order" of Jerome, A.C.J., made February 14, 1985, and seeking return, under Rules 201(5) and 342, from court records of confidential information filed in the case. That application was adjourned sine die with consent of the parties.

Application dismissed.