Hugessen,
J.A.:—This
is
an
appeal
and
a
series
of
cross-appeals
from
a
decision
by
which
the
motions
judge
ordered
the
production,
subject
to
a
protective
order,
of
certain
documents
and
information
said
by
the
Crown's
representative
on
discovery
to
have
formed
a
basis
of
the
reassessment
of
the
plaintiff
to
income
tax.
Those
documents
and
information
were
obtained
by
T.M.
Thomson
and
Associates,
acting
for
the
Department
of
National
Revenue,
in
the
course
of
a
survey
of
wood
pulp
and
newsprint
exporters.
The
purpose
of
the
survey
and
the
use
to
which
it
would
be
put
were
thus
described
in
the
documents
sent
to
the
companies
whose
co-operation
was
solicited:
Purpose
of
survey
The
purpose
of
the
survey
is
to
determine
a
reasonable
range
of
arm's
length
sales
discounts
and
commissions
applicable
to
wood
pulp
and
newsprint
export
prices.
Use
of
survey
The
survey
will
provide
the
basis
for
bilateral
discussions
between
Revenue
Canada
and
the
Internal
Revenue
Service,
and
possibly
other
foreign
tax
authori-
ties
relating
to
the
development
of
a
set
of
"safe
haven”
rules
applicable
to
wood
pulp
and
newsprint
non-arm's
length
export
price
discounts
and
agency
commissions.
(Appeal
Book,
page
83)
It
was
made
abundantly
clear
to
those
surveyed
that
the
information
provided
would
be
kept
confidential
and
their
collaboration
was
sought
and
obtained
on
that
basis.
A
number
of
those
same
companies
opposed
the
production
and
appeared
as
intervenors
before
the
motions
judge
and
as
cross-appellants
before
us.
The
appellant,
the
plaintiff
taxpayer
in
the
proceedings
in
the
Trial
Division,
objects
to
the
judgment
on
the
grounds
that
the
protective
order
is
too
limiting
of
its
rights
to
fight
the
assessment.
Alternatively
it
takes
the
position
that
the
Crown
should
not
be
entitled
to
rely
on
the
confidential
information
at
all.
In
this
latter
position,
it
is
joined
by
the
cross-appellants
who
say
that
their
confidences
should
be
respected.
The
Crown
takes
no
position.
Notwithstanding
that
this
litigation
is
only
at
the
discovery
stage,
the
request
for
the
production
of
documents
in
which
third
parties
claim
confidence
obliges
us,
as
part
of
the
balancing
process,
to
determine
the
public
interest
weighing
in
favour
of
production.
To
do
so,
it
is
clearly
relevant
to
consider
whether
such
production
could
advance
the
litigation.
In
our
view,
it
cannot.
The
law
favours
the
protection
of
information
given
and
obtained
in
confidence
and
in
good
faith.
See
Slavutych
v.
Baker
et
al.
The
principle
was
most
recently
restated
by
the
Supreme
Court
in
Lac
Minerals
v.
International
Corona
Resources?
where
LaForest,
J.,
speaking
for
the
majority,
said
at
page
642:
In
establishing
a
breach
of
a
duty
of
confidence,
the
relevant
question
to
be
asked
is,
"what
is
the
confidee
entitled
to
do
with
the
information?”
and
not,
"to
what
use
he
is
prohibited
from
putting
it?”
Any
use
other
than
a
permitted
use
is
prohibited
and
amounts
to
a
breach
of
duty.
When
information
is
provided
in
confidence,
the
obligation
is
on
the
confidee
to
show
that
the
use
to
which
he
put
the
information
is
not
a
prohibited
use.
In
our
view,
where
the
Crown
has
obtained
information
in
confidence
from
taxpayers
on
a
voluntary
basis
and
for
a
specific
and
defined
purpose,
it
may
not
subsequently
make
use
of
that
information
for
a
different
purpose,
namely
the
reassessment
of
other
taxpayers,
in
circumstances
where
such
use
will
almost
inevitably
result
in
a
breach
of
the
Crown's
undertaking
of
confidence.
Given
the
uncontradicted
evidence
before
us,
it
is
clear
that
the
information
which
the
appellant
now
seeks
was
obtained
from
others
by
the
Crown
in
confidence
and
for
purposes
which
had
nothing
to
do
with
the
appellant's
income
tax
liability.
That
being
so,
the
Crown
cannot
rely
on
it,
and
its
production
for
discovery,
or
at
trial,
should
not
be
permitted.
Whether
or
not
the
Crown
can
continue
to
rely
on
the
assumptions
which
it
has
pleaded
as
underlying
its
reassessment
is
a
question
which
is
not
before
us.
The
appeal
will
be
dismissed.
The
cross-appeals
will
be
allowed.
The
order
of
the
motions
judge
will
be
set
aside
and
the
applications
for
production
will
be
dismissed.
In
the
special
circumstances,
the
Crown
must
bear
the
costs
of
both
the
appellant
and
the
cross-appellants
in
both
courts.
[1976]
1
S.C.R.
254,
55
D.L.R.
(3d)
224.
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