Citation: 2014 TCC 45
Date: 20140213
Docket: 2009-2430(IT)G
BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2010-3477(IT)G
AND BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2011-1909(IT)G
AND BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2012-3018(IT)G
AND BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2012-3256(IT)G
AND BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-3019(IT)G
AND BETWEEN:
CAMECO CORPORATION,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Rip C.J
Introduction
[1]
These are three motions
brought by the respondent in respect of appeals from assessments of tax to
Cameco Corporation for its 2003, 2004, 2005 and 2006 taxation years. The
Minister of National Revenue ("Minister") has challenged the prices
Cameco has charged to, and was charged by, one or more subsidiaries for
uranium. The motions are:
a) for an order for a better List of
Documents with respect to the 2003 appeal and for a List of Documents for each
of the 2004, 2005 and 2006 appeals (Rules 82 and 88 of the Tax Court of
Canada Rules (General Procedure) ("TCC Rules"));
b) for the respondent to conduct its
discovery of the appellant commencing at a date six months following the
service of the documents and Lists of Documents as ordered by this Court;
c) that the appeals for
taxation years 2003, 2005 and 2006 be consolidated pursuant to Section 26
of the TCC Rules; and
d) that the appellant
delete documents relating to the appellant's appeals for 2004, 2005 and 2006
taxation years and identified as R‑006976 and R‑006191 from its
database and replace them with redacted copies of the documents.
[2]
The following are the
dates of the notices of the reassessments for 2003, 2004, 2005 and 2006 that were
appealed:
|
Taxation year
|
Date of the reassessment
|
|
|
|
|
2003
|
December 17,
2010
|
|
2004
|
December 23,
2010 (superceded by subsequent reassessment)
|
|
2005
|
July 25,
2013 (superceded)
|
|
2006
|
July 25, 2013
(superceded)
|
[3]
In order to even
attempt to explain the assessments made by the Minister and the appeals filed
with the Court for Cameco's 2003, 2004, 2005 and 2006 taxation years, I have to
burden the reader with a listing of assessments and appeals for each year. The
myriad of reassessments have bearing on the motions:
a) The Minister's reassessment that
triggered a Notice of Appeal for Cameco's 2003 taxation year was issued by
notice dated February 27, 2009. Cameco filed a Notice of Objection to the reassessment
and on July 22, 2009 filed a Notice of Appeal to this Court. The Minister
issued a new reassessment for Cameco's 2003 taxation year by notice dated December 17,
2010. The appellant did not file a new Notice of Appeal from the
December 17, 2010 assessment but, rather, filed an Amended Notice of
Appeal on January 25, 2011. A Reply to the Amended Notice of Appeal was filed
soon after. All pleadings for the appeal for 2003 are now closed.
b) The Minister issued several
reassessments for Cameco's 2004 taxation year, notices of which are dated
December 18, 2009, May 13, 2010, August 19, 2011,
December 16, 2011 and December 23, 2011. Cameco objected to the reassessments
of December 18, 2009 and May 13, 2010 on March 16, 2010 and
August 11, 2010 respectively. Cameco filed a Notice of Appeal on
November 10, 2010 with respect to the May 13, 2010 reassessment.
Cameco then amended its Notice of Appeal in response to the reassessment of
August 19, 2011 and further amended its Amended Notice of Appeal on
March 15, 2012 in response to the December 23, 2011 reassessment. The
respondent replied to the Amended Amended Notice of Appeal on March 26,
2012. Later on, I am informed by counsel, the Minister again reassessed Cameco
for its 2004 taxation year thus nullifying the reassessment of May 13,
2010. Cameco has objected to the latest reassessment.
c) With respect to Cameco's 2005 and
2006 taxation years: assessments for Cameco's 2005 and 2006 taxation years were
issued by notices dated December 21, 2010 and December 23, 2011
respectively. Notices of Appeal were filed on June 17, 2011 and
August 13, 2012 from reassessments for 2005 and 2006 respectively. An
Amended Notice of Appeal for 2006 was filed on August 29, 2012. On
December 21, 2012 the Minister reassessed both the 2005 and 2006 taxation
years and Notices of Objection for both years were filed on March 22,
2013, which were confirmed by notices dated April 30, 2013. New Notices of
Appeal for 2005 and 2006 were filed on July 25, 2013 and Replies were
filed September 25, 2013. However, I was informed by appellant's counsel
at a telephone conference that on December 28, 2013 the Minister again
reassessed Cameco for 2005 and 2006. Counsel for Cameco has advised Crown
counsel and me at the telephone conference that Cameco will be filing Notices
of Objection to the outstanding reassessments for 2005 and 2006. I anticipate
that new Notices of Appeal will follow eventually.
[4]
On March 21, 2013,
I issued a consent Order in the four appeals for 2003, 2004, 2005 and 2006
outstanding at the time that, among other things, "The parties will
prepare a List of Documents (Full Disclosure) pursuant to Rule 82 of the Tax
Court of Canada Rules (General Procedure) and will serve the list on
the opposing party no later than April 30, 2013. Examinations for
discovery were to be completed by September 30, 2013 and undertakings
given at the examination were to be satisfied by November 29, 2013".
The order was subsequently amended on August 9, 2013 to provide that
examinations for discovery be completed by April 30, 2014.
[5]
On June 12, 2013 I
heard the first of the three motions by the respondent, that is, for a better
List of Documents with respect to the appeal for 2003 and a List of Documents
in accordance with Rule 82 with respect to the appeals for 2004, 2005 and
2006.
[6]
Before I was able to begin
to consider the merits of each of the motions, Cameco had filed new Notices of Appeals
for 2005 and 2006 on July 25, 2013. The Minister had also reassessed
Cameco for its 2004 taxation year. It was not apparent at the time I heard the
motions on June 12, 2013 that Cameco had been reassessed again on December 21,
2012 for each taxation year. And, on December 28, 2013, the Minister yet
again reassessed Cameco for its 2005 and 2006 taxation years.
[7]
The Minister's
reassessments of December 28, 2013 for Cameco's 2005 and 2006 taxation
years replaced the reassessments of December 21, 2012 that had previously replaced
the earlier reassessments for 2005 and 2006 that were originally appealed. With
respect to the Notice of Appeal from the reassessment for Cameco's 2004
taxation year, an assessment was also superceded by another reassessment. The
question is whether there are currently appeals before me for 2004, 2005 and
2006.
[8]
There are none. I refer
to Abrahams v. M.N.R., in which President Jackett, as he then was, explained
that:
Assuming that the
second re‑assessment is valid, it follows, in my view, that the first re‑assessment
is displaced and becomes a nullity. The taxpayer cannot be liable on an
original assessment as well as on a re-assessment. It would be different if one
assessment for a year were followed by an "additional" assessment for
that year. Where, however, the "re‑assessment" purports to fix
the taxpayer's total tax for the year, and not merely an amount of tax in
addition to that which has already been assessed, the previous assessment must
automatically become null.
I am therefore, of
opinion that, since the second re‑assessment was made, there is no relief
that the Court could grant on the appeal from the first re‑assessment
because the assessment appealed from had ceased to exist. There is no
assessment, therefore, that the Court could vacate, vary or refer back to the
Minister. When the second re‑assessment was made, this appeal should have
been discontinued2 or an application should have been made to have
it quashed3.
2 The
appellant could have asked the respondent to agree to pay his costs as a
condition to his discontinuing. If the respondent had refused, he could have
applied for leave to discontinue on terms that the respondent be ordered to pay
his costs of the appeal that had been made abortive by the second re‑assessment.
3 An
alternative view is that the appeal should be allowed and the assessment
appealed from declared null. I am of the view that the correct view of the
statute is that there is no basis for an appeal from an assessment that has become
null by virtue of a re‑assessment. Certainly such an appeal is
unnecessary and it would be an unnecessary expense and expenditure of time and
energy if the practice of taking such appeals developed.
[9]
Both counsel agreed that Cameco
was reassessed for its 2005 and 2006 taxation years, notices of which are dated
December 28, 2013. They also agree that the 2004 taxation year was
reassessed and the later reassessment is subject of a Notice of Objection that
is currently being considered by the Minister. Since all previous reassessments
are nullities as a result of the earlier reassessments having been displaced,
so must the appeals from these assessments be nullities. Given the
circumstances, the respondent's motion for Lists of Documents with respect to the
appeals for 2004, 2005 and 2006 — appeals that no longer exist — must
be quashed.
[10]
The motion for an order
to delete documents and replace them with redacted documents was with respect
to appeals for 2005 and 2006 which are no longer valid. Therefore the
application for the order to delete documents also will be dismissed. Similarly
the respondent's application to consolidate the appeals for 2003, 2005 and 2006
would also be dismissed since there are no appeals for 2005 and 2006 to
consolidate. However, by letter dated January 31, 2014 the respondent's
counsel advised that the respondent "is withdrawing its motion for
consolidation of the 2003, 2005 and 2006 appeals without prejudice to our
ability to bring similar consolidation motion after the new notices of appeal
have been filed. Our decision to withdraw is based on the appellant's
representations that it intends on filing new Notices of Objection and new Notices
of Appeal to the reassessments. Further to the case management conference held
on January 30, 2014 we confirm that we intend on filing a new notice of
motion for consolidation of the 2003, 2005 and 2006 years".
Better List of Documents – 2003
[11]
The respondent's motion
for service of a further and better List of Documents with respect to the appeal
from the appellant's 2003 reassessment remains. Each party was to file and
serve a List of Documents in accordance with Rule 82. This motion raises two issues. First,
whether a further and better affidavit of document is warranted on the basis
that the appellant has additional relevant documents in its possession; and
second, whether the appellant has improperly made claims of solicitor‑client
privilege. Rule 88 provides a range
of remedies available where relevant documents may have been omitted or claims
of privilege may have been improperly made. Rule 88 provides:
|
Where the Court is satisfied by
any evidence that a relevant document in a party’s possession, control or
power may have been omitted from the party’s affidavit of documents, or that
a claim of privilege may have been improperly made, the Court may,
|
Si elle est
convaincue qu’une partie n’a pas mentionné dans sa déclaration sous serment
un document pertinent qui se trouve en sa possession, sous son contrôle ou
sous sa garde ou que la prétention au privilège n’est pas fondée, la Cour
peut :
|
|
(a) order
cross-examination on the affidavit of documents,
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a) ordonner qu’il y ait
contre-interrogatoire sur la déclaration sous serment de documents;
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(b) order service of a further and better affidavit of
documents,
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b) ordonner la
signification d’une autre déclaration sous serment de documents plus complète;
|
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(c) order the disclosure or production for inspection of
the document or a part of the document, if it is not privileged, and
|
c) ordonner la
divulgation ou la production, à des fins d’examen, du document, en tout ou en
partie, si celui-ci n’est pas privilégié;
|
|
(d) inspect the document for the purpose of determining its
relevance or the validity of a claim of privilege.
|
d) examiner le document
afin d’établir sa pertinence ou de décider si la prétention au privilège est
fondée.
|
[12]
The respondent alleges
that the List of Documents filed for the 2003 appeal does not contain all
relevant documents in the appellant's possession, control or power. In
addition, documents in Schedule "A" to the List of Documents
contain redactions for which no legal basis is identified and
Schedule "B" to the List of Documents does not properly describe
all relevant documents over which solicitor‑client privilege is claimed.
[13]
Ms. Karen Hodges,
a senior paralegal in the Tax Law Services Section of the Department of
Justice, is responsible for much of the organization of the Cameco appeals. The
Crown filed an affidavit of Ms. Hodges in support of its motions.
Ms. Hodges' affidavit is subject to a confidentiality Order.
[14]
Appellant's counsel
delivered DVDs containing Cameco's documents to Ms. Hodges and she directed
their uploading to Department of Justice computers in respect of the 2003
appeal. She also has reviewed a portion of Cameco's 136,499 documents. She has
access to correspondence between the Department of Justice and Cameco's
lawyers, Osler, Hoskin & Harcourt LLP ("Osler").
[15]
At the end of April
2013, the Crown received from Osler 12 DVDs containing documents for the 2003
appeal. The last DVD consisting of about 15,000 documents was received on
April 30, 2013. Subsequently the parties considered documentary
disclosure, in particular the scope of each party's production and coding of
each document, that is, in Ms. Hodges' words, "the type of
information about each document that would be provided (i.e. titles, dates,
source, to, from, etc.)". The majority of matters considered by the
parties were not resolved.
[16]
Ms. Hodges lists 26 documents
missing from the appellant's production. She identified examples of four types
of documents she was unable to locate after reviewing coding information
provided by the appellant and full text documents using optical character
recognition.
[17]
The four types of
documents include the following complaints:
a) authors and dates of
documents on the List of Documents do not always correspond with the author and
date on the face of the document referred to;
b) the appellant
described some documents as "represented" and "selected"
but without explanation;
c) some documents were
claimed as privileged but without reason; and
d) some documents lacked
signatures and the Crown could not determine if the documents were drafts or
executed copies.
[18]
Documents that the
respondent identifies as missing include executed copies of agreements of draft
versions listed in the affidavit. I am asked to consider whether the existence
of draft documents is sufficient evidence that final copies of the documents,
that is, executed copies have not been disclosed.
[19]
Mr. Peter Macdonald,
a lawyer at Osler was cross‑examined on his affidavit opposing the
motion. Mr. Macdonald was "directly"
involved in the collection, review and production of documents by Cameco along
with exchanges with respondent's counsel with respect to Cameco's appeal for
2003.
[20]
Mr. Macdonald
replied that several documents cannot be located; that Cameco may not be in
possession of signed copies of some of the documents, for example, letters sent
to third parties; that an agreement was signed but a signed copy cannot be
located. Also, while an electronic inter‑office memorandum was identified
the attachment referred to in the memorandum was not electronically attached to
the document. Mr. Macdonald suggests that the respondent consider
requesting the document at discovery although Cameco explained this type of
issue in correspondence to the Crown.
[21]
As far as Cameco
producing "representative" and "selected" material and
Ms. Hodges stating that the Crown has not been advised of their basis,
Mr. Macdonald referred to correspondence to the Crown that it was
providing production of documents "representative" of contract
administrative files and "selected" contract sales within the Cameco
Group, and the Crown's letter to Osler advising that it was "willing to
forego, for the moment", certain files within the Cameco Group.
[22]
Rule 88 of the TCC
Rules is similar to Rule 30.06 of the Ontario Rules of Civil
Procedure.
A review of reported cases relating to Rule 30.06 will assist in
considering Rule 88, given that the Court's review of Rule 88 is
limited.
[23]
Rule 30.06 will
apply where there is proof that relevant documents exist and have not been
disclosed. The level of proof required by the party bringing the motion must
take into account the fact that the moving party does not have access to the
other party’s documents. However, speculation, intuition and guesswork that
other documents exist is not sufficient or persuasive evidence.
[24]
Mr. Macdonald
revealed that Osler has only made inquiries into documents that are in Osler’s
possession. Osler has not asked Cameco to search anew for documents that it may
not have produced earlier or to otherwise confirm that it had produced all
documents in accordance with Rule 82.
[25]
The respondent's view
is that the existence of draft copies of agreements is persuasive evidence that
there is a reasonable probability that draft copies eventually resulted in
formal, executed agreements.
[26]
The appellant argued that
a balanced approach is necessary and requests for documents must be reasonable
when deciding whether or not to grant the motion for a further and better
affidavit. In his affidavit, also subject to a
confidentiality order, Mr. Macdonald estimated that over 14,000 hours have
been spent by Osler and a third party on the collection, review and production
of documents, encompassing the work of over 70 legal personnel. Cameco's
costs have been substantial.
[27]
In his affidavit,
Mr. Macdonald described the process employed by Osler lawyers and its
client to assemble and identify documents. Once it was apparent in Spring 2009
that litigation may ensue regarding transfer pricing in transactions between
Cameco and a subsidiary of the Cameco Group of companies ("Cameco
Group"), he and other Osler lawyers made inquiries to determine persons involved
in the transfer pricing transactions. Approximately 46 individuals employed and
formerly employed by the Cameco Group were identified as potentially having
relevant information with respect to a potential litigation arising out of
income tax assessments. Mr. Macdonald refers to these individuals as
"custodians".
[28]
The custodians produced
hard copy documents to its litigation team, including lawyers and students at
Osler. A number of the litigation team attended at Cameco Europe to review the
documents and "insure relevant documents were collected for review".
An evidence management service provider scanned and coded all the documents.
All of the scanned hard copy documents were put into a document review system.
[29]
An international
accounting firm was engaged to assist in the collection of electronically
stored information ("ESI"). The contents of the computers of the
custodians still with Cameco were imaged and preserved to the extent they were
within the relevant dates. A computerized de‑duplication of emails was
applied. Then each custodian's user files were processed. In all 68,000 hard
drive emails and over 125,000 hard drive user files were processed.
[30]
The custodians' email
files located on Cameco's server were also copied and those within the relevant
date ranges were applied. De‑duplication was applied to Cameco's server
emails as well. Approximately 500,000 service emails were processed.
[31]
The drives on Cameco's
servers where custodians indicated they saved potentially relevant documents
were copied and irrelevant folders were excluded. Again de‑duplication
was applied, this time to server user files. Over 350,000 server user files
were processed.
[32]
Mr. Macdonald
detailed the filing structure of the Cameco Group and how those files were
identified during the documentation collection process. Approximately 110,000
hard copy documents were collected from the custodians, loaded into the
document review system and were reviewed for relevance by lawyers and students
at Osler. The documents were allocated to 22 categories such as the
corporation's "Corporate Documents", "Services",
"Purchases", "Sales", etc.
[33]
Mr. Macdonald
states the volume of the ESI is "enormous" and search terms were
necessary to identify potentially relevant documents. The parties could not
readily agree to search terms. The Crown rejected Osler's set of search terms
at a meeting on November 1, 2011 and correspondence was exchanged through
March 2013 regarding the necessity of using search terms to identify relevant
ESI and other matters. That the parties could not agree on search terms did not
help the process.
[34]
The search terms
devised by the appellant, Mr. Macdonald explains, were taken from
frequently encountered terms with respect to the various categories. To
determine whether they were sufficiently broad and catch documents previously
identified in a manual review, the search terms were test run in the hard copy
database. Upon review of the results, Cameco was satisfied that its search
terms were comprehensive and would best identify potentially relevant ESI.
[35]
On invitation of
Cameco, the respondent provided comments on the search terms proposed for one
category but not for the others. Cameco engaged a third party to perform, under
Osler's supervision, a first level review of the ESI identified as relevant by
the search strings. Quality control was performed by Osler.
[36]
In all Cameco has
produced 59,000 hard copy documents and generally classified the documents into
categories and 96,000 electronic documents and "generally indicated"
which search term related to each document. Documents were delivered on a
"rolling basis" between August 11, 2011 and April 30, 2013.
[37]
The enormous volume of ESI
and resources spent in this dispute leads me to consider whether the
parties — not the Court — is making the best use of time and money in
preparing for discovery. The parties are entitled to access to all relevant
information but, on the other hand, all litigation should be conducted
efficiently in terms of both time and cost.
[38]
Even before the release of
the Wolf Report
on administration of justice was released in 1996, lawyers, academics and
judges have been concerned as to the high cost and abnormal time spent in
litigation. Gradually the concept of proportionality entered into rules of
practice of most Canadian courts.
Lord Justice Jackson wrote that the concept of proportionality requires
"dealing with a case in ways which are proportionate to the amount of
money involved, the importance of the case and the complexity of the
issues".
[39]
That is not to say that
judges, in exercising their inherent jurisdiction, before 1996, did not
consider earlier proportionality in arriving at their decisions.
[40]
The codification of the
concept of proportionality is not necessarily the cure for discovery problems.
There is always the human element present.
[41]
The concept of
proportionality has become increasingly important as the use of electronic
discovery grows. An example of proportionality informing discovery in this
Court is in Canadian Imperial Bank of
Commerce v. The Queen.[9] In deciding
whether to grant an order for full disclosure pursuant to Rule 82,
Justice Jorré held:
109 Both
parties have significant resources, there is a good deal of tax at stake and
there appears to be significant and serious issues at stake. In the sense
proportionality is often discussed, it is probably not an issue here.
110 However,
there is a long tradition in tax of trying to keep down, if possible, the
amount of time and effort spent on pretrial stages of the proceeding. It is reflected
in the choice of Rule 81 as the default rule. Arguably, this tradition is also
a kind of consideration of proportionality although, to my knowledge,
discussions of proportionality started much more recently than this tradition.
[42]
As in CIBC, where a
great deal of tax is at stake, and the issues are particularly complex, there
should be an effort to keep costs down at least during pretrial stages of a
proceeding, if not later as well. It may well be that a party is entitled to
all documents relevant to a matter in issue in an appeal but we must sometimes
ask if although the document is relevant is it material to the issue or of
significant value in the court's appreciation of the evidence?
[43]
Electronic discovery
poses many challenges and a more practical and efficient process is necessary
to ensure that the burden of discovery remains proportionate to the issues,
interest and money at stake. The Sedona Canada Principles have become
the de facto standard for many rules of civil procedure. With
respect to electronic discovery, the
The Sedona Canada Principles Addressing Electronic Discovery in
Principle 2 provides: [10]
In
any proceeding, the parties should ensure that steps taken in the discovery
process are proportionate, taking into account (i) the nature and scope of the
litigation, including the importance and complexity of the issues, interest and
amounts at stake; (ii) the relevance of the available electronically stored
information; (iii) its importance to the court’s adjudication in a given case; and
(iv) the costs, burden and delay that may be imposed on the parties to deal
with electronically stored information.
[44]
The facts in this appeal are
complex. The Affidavit of Peter Macdonald describes the document collection
process and it is apparent that the appellant has dedicated significant
resources including employing expertise, time and costs. Yet, given the
complexity of this case and the amount at stake, it is not unreasonable for the
appellant to review and conduct additional searches and make further inquiries
into certain documents.
[45]
There are deficiencies in
the appellant’s production of documents and, having agreed to conduct full
disclosure, the appellant must provide all documents that are relevant and
material to any matter in issue. The appellant's law firm did review material
in its possession but, as Mr. Macdonald stated, counsel did not require
the appellant to make a further review of material in its possession, for
example.
[46]
I am informed by respondent's
counsel that on January 21, 2014 the Crown received a DVD from the
appellant containing 2,389 documents. At a case management conference on
January 30 of this year, appellant's counsel advised that these may be all
the outstanding documents being sought by the respondent. I did inform counsel
of both parties that I would be ordering a better List of Documents with
respect to the 2003 appeal and that the appellant would be required to make
additional searches. Since the respondent has had possession of the latest DVD
for close to a month her application to delay discovery of the appellant will
be extended to 120 days from service of any additional List of Documents. Counsel
replied that the appellant would require 30 days to make the searches.
Privileged Documents
[47]
The next issue in this motion
is whether the appellant improperly claimed privilege over Schedule A
documents and Schedule B documents. Solicitor‑client
privilege is strongly guarded, and in only certain circumstances will
exceptions be granted. Rule 82[11]
requires as part of full disclosure that any documents for which the party
claims privilege must also provide grounds for the claim. When privilege is
claimed by a party, the onus is on the party claiming privilege.
a) Schedule "A"
Documents
[48]
The respondent submits
that the current Schedule A to the List of Documents does not identify
which documents have been redacted, nor provide a basis for privilege.
Documents such as an interoffice Cameco memo regarding a "To do List"
for an Offshore Structure has been redacted. However, respondent complains, because
neither the author nor the recipient is a lawyer, it is difficult to infer that
privilege has been properly claimed.
[49]
All potentially
relevant documents, Mr. Macdonald states, were examined for privilege and,
where deemed appropriate, the particular document was redacted to protect
privileged information, some documents were redacted in full and produced.
Electronically stored documents that were redacted were stamped with the
reasons for the redaction. All electronically stored documents were redacted
only for solicitor‑client privilege. Documents originally in paper form
were redacted to protect solicitor‑client privilege or, in a "small
handful" of redactions, to protect personal information. For example, respondent asserts, a consulting
agreement renewal provides a salary amount to be redacted however, another
version of the same agreement that was produced does not have the same
redaction. No basis was provided for the redactions.
(b) Schedule "B" to
Rule 82 – List of Documents
[50]
The respondent also claims
that the Schedule B to the List of Documents is deficient in that it lacks
a List of Documents for which privilege is claimed.
[51]
Mr. Macdonald
acknowledges that the List of Documents served and filed by the appellant did
not contain a detailed Schedule B listing all documents for which Cameco
claims privilege. He states that, based on his experience and discussion with
colleagues, it is not unusual for parties not to include such a detailed
Schedule B. However, subsequently, in view of the Crown's request, a
detailed Schedule B consisting of approximately 36,000 documents was
served. The detailed Schedule B, according to Mr. Macdonald, also
contains explanations supporting the privilege claim.
[52]
The respondent does not
agree. Her counsel argues that in many instances sufficient information is not
provided to establish privilege. There
are several documents where no information is given except for the document
type, and the author. This includes documents prepared by a non-lawyer and sent
to groups of Cameco employees, with
no further information for claiming privilege. In some circumstances, the description of documents states: "repeats
legal advice provided by counsel".
[53]
My colleague Justice D’Arcy
in Imperial Tobacco
affirmed that communications between employees of a company that include legal
advice provided by the corporation’s lawyer will be considered privileged.
However, Justice D’Arcy also emphasized that privilege will not exist for
internal communication that does not pass confidential legal advice or involve
the seeking of legal advice:
[57] However, an internal communication that does not
constitute the passing on of confidential legal advice or directly involve the
seeking of legal advice will not be privileged. Further, such a document does
not become privileged merely because a copy is sent to a lawyer. However, if
the lawyer marks the document or makes a note on it, then it becomes a working
paper of the lawyer and the marked copy is privileged.
[Footnote
omitted.]
[54]
A task before me is to
determine whether internal communication contained legal advice or whether it
was non-privileged internal communication. Solicitor‑client privilege may
exist if it involved communication with counsel. However, where no information
is provided about who prepared the documents one cannot even adduce the grounds
for privilege. It may very well be that the documents in question are protected
due to solicitor-client privilege but it is up to the appellant to provide some
basis for their claim. For that reason, I will have to allow the respondent’s
motion that the appellant provide a further and better affidavit of documents
that properly discloses any claim for privilege.
Redactions
[55]
Turning briefly to
redactions for privacy, the appellant submits that in certain situations,
redactions were made for privacy, including salaries. Justice Webb in Heinig v. Canada held that
in finding a document to contain confidential information that may not be
relevant does not necessarily require that the entire document should be
disclosed. Webb J., as he then was, agreed that the social insurance
number and income of third parties were to be redacted:
[10] It seems to me that the reference to all documents
does not necessarily mean that an entire document should be disclosed to an
appellant if only part of that document is relevant to the appeal and another
part contains confidential third party information that is not relevant to the
appeal. In my opinion it would not be appropriate for the entire document
to be disclosed if these parts could be severed. Only the relevant part will be
required to be disclosed if the relevant part can be severed from the
irrelevant part without rendering
the relevant part incomprehensible. If the irrelevant part that contains
confidential third party information cannot be severed from the relevant part
without rendering the relevant part incomprehensible, then the entire document
would have to be disclosed.
[Emphasis Added]
[56]
With respect to improperly
claiming privilege over documents in its Schedule A and Schedule B
documents, the appellant did not properly provide a basis for the documents
where privilege is claimed. The appellant shall review redactions to ensure
privilege has been properly claimed and provide a basis for documents where
privilege has been claimed. Redactions for privacy, such as the salary are
appropriate so long as it does not render the relevant parts incomprehensible.
Description of Documents
[57]
Lastly, the respondent
took issue with the description of documents provided by the appellant pursuant
to Rule 84 of the TCC Rules:
|
A list of documents made in
compliance with section 81 or 82 shall enumerate the documents in a
convenient order as briefly as possible but describing each of them or, in
the case of bundles of documents of the same nature, each bundle shall be
described sufficiently to enable it to be identified.
|
Une liste de
documents établie en vertu de l’article 81 ou 82 doit suivre la forme
appropriée et énumérer les documents dans un ordre commode et aussi
succinctement que possible tout en donnant la désignation de chacun d’eux ou,
dans le cas de liasses de documents de même nature, la désignation de chaque
liasse, de façon suffisante pour en permettre l’identification.
|
[58]
Currently, the
descriptions of documents are based on the metadata of the documents. These
documents each have a unique numerical identification. There are elements such
as the author and date in the description that do not correspond directly to
the author and date on the face of the document.
[59]
The respondent argues
that the use of metadata to describe the document is unsatisfactory, that there
should be sufficient information to describe each document. In oral
submissions, the respondent argued that the appellant's use of metadata has resulted
in a "maldescription" of the documents.
[60]
With respect to the
respondent’s claim that certain documents produced by Cameco showing the author
and date on the List of Documents do not always correspond with the author and
date on the face of the documents, Mr. Macdonald said that the respondent
was informed that Cameco would be using the metadata associated with each ESI
document to produce its List of Documents. His understanding of metadata is
that it describes certain properties of electronically stored documents that
are automatically assigned to the document through the computer operating
system and the application used to create the documents. Metadata can indicate
properties such as the date a document was created or modified on a computer.
In providing copies of relevant ESI, Cameco also provided metadata such as
author, date of document for each available document to the extent available. This
metadata was provided on Schedule A of the List of Documents. However, in
some cases, the author or date indicated on the face of a document varies from
the metadata about that document.
[61]
At least one appeal in
this Court with a high volume of documents has proceeded utilizing a unique
numerical identifier for the description of the document. Justice Lane in Solid Waste[16] held that in cases where large volumes of
documents were involved, a more practical system calls for documents to be
described using an alpha-numeric or numeric identifier:
9 The
sheer quantity of documents in many modern litigations demands a precise
identification system for swift and certain retrieval of documents in
examinations for discovery and trial. Such a system should also enable counsel
to be certain that a document produced at trial has indeed been previously
produced. It must enable counsel examining a collection of the opposite party's
documents to be satisfied that he has the whole collection as described in
Schedule A. A modern rule as to identifying documents cannot ignore the
computer and its need for a unique identifier for every item to be retrieved.
Unless very extensive details about each document are entered in Schedule A, an
alpha-numeric or numeric identifier is necessary. The preparation of a Schedule
A containing a detailed description of every document would be a truly
monumental task in many lawsuits. It is not practical.
10 The
logic of these practical requirements drives one inexorably to the proposition
that proper identification demands numbering each document with a unique
number. Such a number is far more valuable than a long-winded description of
each document, including its sender, addressee, date, etc., and the creation of
a numeric system is far less costly when thousands of documents are involved.
[62]
In oral submissions before me,
the respondent's counsel commented that it would actually be more helpful to only
have the document identifier number and no author and no date. I agree. So long as the appellant has provided sufficient description of the documents
using a numerical identifier for each document, its identification of the
document is satisfactory.
[63]
An order will be issued as
follows:
1. The Motions with
respect to the appellant's appeals for 2004 (Court file No. 2010‑3477(IT)G),
2005 (Court file Nos. 2011‑1909(IT)G and 2013‑3018(IT)G) and
2006 (Court file Nos. 2012‑3256(IT)G and 2013‑3019(IT)G) are
quashed, except for the motion to consolidate the appellant's appeals for 2003,
2005 and 2006 which the respondent has withdrawn;
2. The appellant shall
serve a further and better affidavit and List of Documents in accordance with
Rule 82 of the TCC Rules in Court File No. 2009‑2430(IT)G
with respect to its appeal from an assessment for its 2003 taxation year, and
in particular:
i) the List of Documents
shall contain all relevant and material documents in the appellant's
possession, control or power that are not included on the List of Documents
previously filed and served on the respondent;
ii) the appellant shall
identify the legal basis of redactions in documents included in Schedule "A"
to the List previously filed and served; and
iii) the appellant shall
describe all relevant and material documents over which solicitor‑client
privilege is claimed in Schedule "B" to the List of Documents
previously filed.
3. The appellant shall
serve a further and better affidavit of documents on the respondent not later
than 30 days of this Order or such other date as the parties may agree and
the Court approve upon written notice;
4. The respondent shall
conduct its discovery of the appellant commencing not later than 120 days
after service of the further and better affidavit of documents or upon other
time as the parties may agree and the Court approve upon written notice; and
5. Costs shall be in the
cause.
Signed at Ottawa, Canada, this 13th day of February 2014.
"Gerald J. Rip"
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