Date:
20130531
Docket:
T-1761-12
Citation:
2013 FC 584
Ottawa, Ontario, May 31, 2013
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
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BANK OF MONTREAL
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Applicant
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and
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GIANNI SASSO
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an application for judicial review seeking to set aside an Order of an
Adjudicator dated September 18, 2012, made during the course of a hearing by
that Adjudicator, acting under the provisions of Division XIV – Part III of the
Canada Labour code dealing with the production by the Applicant of certain
documents in respect of which privilege was claimed.
[2]
The
hearing itself concerned a complaint by the Respondent Sasso that he had been
unjustly dismissed by the Applicant Bank of Montreal (BMO). The history of the
matter can be briefly stated. Santini, a customer of BMO or an affiliate
Nesbitt Burns, asserted that his account had been viewed by an employee of BMO
named Rao, and that Rao had misappropriated funds from that account. Rao was Santini’s
brother-in-law. It was later alleged that Rao had defrauded other BMO clients
of millions of dollars, whereupon BMO and Nesbitt Burns initiated proceedings
against Rao.
[3]
Santini
brought an action against BMO in the course of which he alleged that he had
told the Respondent Sasso about his suspicions respecting Rao’s activity. BMO
retained outside counsel, the Norton Rose firm; and in particular, a lawyer in
that firm, Devereux, to conduct interviews, including an interview with Sasso
and to provide legal advice. Notes were taken during that interview by a BMO
security person. It was alleged that during that interview, Sasso admitted that
Santini had disclosed to him his concerns respecting Rao’s conduct. A BMO
officer testified before the Adjudicator that Santini made this disclosure to
Sasso and that Sasso did not advise his superiors about it. This formed the
basis upon which Sasso was terminated.
[4]
The
Adjudicator commenced the hearing respecting Sasso’s complaint. After some
evidence had been heard, Sasso’s counsel made a request that BMO produce
certain documents, in particular:
1)
Affidavits,
discovery transcripts or statements from the (Santini) proceedings;
2)
The
records of BMO’s investigation into Sasso’s alleged misconduct;
•
Specifically,
notes and summaries (reports) of investigative interviews held, and
•
BMO
internal correspondence pertaining directly to the decision to terminate Sasso
for his alleged misconduct.
[5]
The
Adjudicator gave an oral decision respecting the request for production. Subsequently,
the Adjudicator gave written reasons for that decision. This decision is the
subject of the present judicial review. The Order respecting production is set
out at the end of these reasons and states:
32. For these reasons, I ordered BMO to deliver
to Mr. Sasso the following documents at the hearing’s continuation on September
12, 2012:
a.
Unredacted
affidavits, discovery transcripts or statements from the two civil court
proceedings. For clarity, production is ordered of only those affidavits, discovery
transcripts or statements that pertain to BMO’s allegation that Mr. Santini
informed Mr. Sasso that he was concerned about Mr. Rao’s misappropriation of
funds and improper viewing of his bank accounts and that he failed to report
those concerns.
b.
The
investigative notes and summaries (reports) of Investigative Interviews held in
the BMO investigation of Ms. Sasso’s (sic) alleged Misconduct, including but
not limited to those investigative notes or summaries (reports) of interviews
held with Mr. Sasso and Ms. Fortino.
Any additional BMO internal correspondence
pertaining directly to the decision to terminate Mr. Sasso for his alleged
misconduct, subject to redactions for solicitor-client privilege or legal
advice privilege. BMO is directed to bring such internal communications without
redactions to the hearing’s continuation.
[6]
Shortly
after the release of this decision, counsel for BMO sought clarification of
certain parts of this Order, including what specific documents were ordered to
be produced. The Adjudicator stated that the Order speaks for itself and that
she had no intention of adding to the ruling.
[7]
BMO
now asks that this Court set aside that Order. It further asks that I review
the documents myself and make an Order as to production and privilege, and that
I make an Order as to waiver; a point that the Adjudicator, at paragraph 31 of
her decision, specifically declined to deal with. As to these two latter
points, I will not make an Order as to production; I view that as the
Adjudicator’s role, and I will not rule on waiver for the same reason.
[8]
With
respect to the Order itself, BMO does not take objection to what is ordered to
be produced in paragraph number 1 (Santini litigation documents); it does
object to what is ordered in paragraph number 2.
[9]
The
issues that are required for determination are:
1.
Should
the Court intervene in respect of this Order, which is an interlocutory Order
made in the course of a hearing that is not yet finished?
2.
If
the Court should intervene, what is the standard of review?
3.
Under
the appropriate standard of review, should the decision be set aside and sent
back for re-determination?
ISSUE#
1: Should
the Court intervene in respect of this Order, which is an interlocutory Order
made in the course of a hearing that is not yet finished?
[10]
Counsel
for BMO conceded that the case law demonstrates that, save for exceptional
cases, a Court should not intervene by way of judicial review in interlocutory
decisions made by a tribunal during the course of its proceedings until a final
determination has been reached. A good review of the law on this point has been
given by Justice de Montigny of this Court recently in Garrick v Amnesty
International Canada, 2011 FC 1099. I repeat what he wrote at paragraphs
46, 51 and 54:
46 It is trite law that
interlocutory decisions of administrative bodies are not subject to judicial
review until a final decision is issued. For a variety of reasons, this rule
has been upheld both by this Court and the Federal Court of Appeal on numerous occasions.
Firstly, the application may well be rendered moot and unnecessary by the
ultimate outcome of the case, and the tribunal may change its original position
once it reaches its final decision. Similarly, an application may be overtaken
by events. The second application for judicial review in the current
proceedings is a case in point.
.
. .
51 I have not been persuaded
by this line of reasoning, for a number of reasons. A review of the case law
shows that the "exceptional circumstances" allowing the courts to
intervene and to review interlocutory decisions have been quite narrowly
defined. While exceptional circumstances may not be exhaustively defined,
courts have held that such will exist when the impugned decision is dispositive
of a substantive right of a party (Canada v Schnurer Estate, [1997] 2 FC 545
(FCA), 208 NR 339 (FCA)), raises a constitutional issue (AG of Quebec and
Keable v AG of Canada et al, [1979] 1 S.C.R. 218 [ Keable ]), or goes to the
legality of the tribunal itself (Cannon v Canada, [1998] 2 FC 104 (FCTD),
[1997] F.C.J. No. 1552 (QL) (FC)) . More recently, the Federal Court of Appeal
has gone so far as to say that even those circumstances may not qualify as
"exceptional", if there is an internal administrative remedy
available:
.
. .
54 The Court of Appeal has
also held that a tribunal's interlocutory decisions on a question of law
dealing with the admissibility or compellability of evidence does not
constitute a jurisdictional question justifying immediate judicial review when
the tribunal is vested with the authority to hear and determine all questions
of law and fact, including questions of jurisdiction that arise in the course
of proceedings: Bell Canada v Canadian Telephone Employees Association, 2001
FCA 139 at para 5, 105 ACWS (3d) 483 (FCA); Canada (Minister of Citizenship and
Immigration) v Varela, 2003 FCA 42 at para 3, 238 FTR 200 (FCA).
[11]
The
Federal Court of Appeal in Zundel v Canada (Human Rights Commission),
[2000] 4 FC 255, addressed the subject, where Sexton JA, for this Court, wrote
at paragraph 10:
10 Are the applications for
judicial review premature? As a general rule, absent jurisdictional issues,
rulings made during the course of a tribunal's proceeding should not be
challenged until the tribunal's proceedings have been completed. The rationale
for this rule is that such applications for judicial review may ultimately be
totally unnecessary: a complaining party may be successful in the end result,
making the applications for judicial review of no value. Also, the unnecessary
delays and expenses associated with such appeals can bring the administration
of justice into disrepute. For example, in the proceedings at issue in this
appeal, the Tribunal made some 53 rulings. If each and every one of the rulings
was challenged by way of judicial review, the hearing would be delayed for an
unconscionably long period. As this Court held in Anti-dumping Act (In re) and
in re Danmor Shoe Co. Ltd.,7 "a right, vested in a party who is reluctant
to have the tribunal finish its job, to have the Court review separately each
position taken, or ruling made, by a tribunal in the course of a long hearing
would, in effect, be a right vested in such a party to frustrate the work of
the tribunal."
[12]
Counsel
for BMO argues that the present circumstances are “exceptional”; and therefore,
should be considered by the Court. The “exceptional” nature of the
circumstances, it is argued, is that the Order would require BMO to disclose
documents that it truly believes are subject to privilege.
[13]
The
near-absolute nature of solicitor-client privilege has been stated many times
by the Court. Rothstein J, in the Supreme Court of Canada in Goodis v
Ontario (Ministry of Correctional Services), [2006] 2 S.C.R. 32, wrote at
paragraph 20 that solicitor-client privileged documents should be ordered to be
disclosed only where absolutely necessary, and that absolute necessity is as
restrictive a test that can be formulated short of absolute prohibition in
every case.
[14]
Justice
Major, writing for the Supreme Court in R v McClure, [2001] 1 S.C.R. 455,
wrote at paragraph 61 that any impediment to open candid and confidential
discussion between lawyers and their clients will be rare and reluctantly
imposed.
[15]
In
R v Gruenke, [1991] 3 S.C.R. 263, Lamer CJ for the majority wrote at
paragraph 52 that, while the Court must seek the truth, through probative,
trustworthy and relevant evidence, that search may be restricted where there
are overriding social concerns or judicial policy such as privilege.
[16]
I
therefore find that, in exceptional circumstances such as those where a serious
concern is raised that an interlocutory decision of a tribunal may require
production of privileged documents, this Court may intervene so as to determine
if such an Order was appropriate. The risk that a document that is truly the
subject of privilege may be ordered to be disclosed, thereby defeating the
purpose of privilege, is sufficient, in my view, to warrant this Court hearing
the matter in the circumstances of this case.
ISSUE#2: If
the Court should intervene, what is the standard of review?
[17]
The
parties are essentially agreed that I should review the decision in respect of
the principles of law applied on the basis of correctness, and with respect to
the factual determination on the basis of reasonableness.
ISSUE# 3: Under the
appropriate standard of review, should the decision be set aside and sent
back for re-determination?
[18]
At
issue are some thirty or so documents at issue. They were identified by BMO
Counsel in its memorandum of argument filed with the Adjudicator. The evidence
is that the Adjudicator did not look at any of these documents before making
the decision under review.
[19]
The
Supreme Court has stated that where a claim for privilege has been raised, the
documents should be examined by the decision-maker, or the decision-maker
should be satisfied on reasonable grounds, as to the interests at stake.
McLachlin J (as she then was) wrote for the majority in A.M. v Ryan,
[1997] 1 S.C.R. 157 at paragraph 39:
39 In order to determine whether privilege
should be accorded to a particular document or class of documents and, if so,
what conditions should attach, the judge must consider the circumstances of the
privilege alleged, the documents, and the case. While it is not essential in a
civil case such as this that the judge examine every document, the court may do
so if necessary to the inquiry. On the other hand, a judge does not necessarily
err by proceeding on affidavit material indicating the nature of the
information and its expected relevance without inspecting each document
individually. The requirement that the court minutely examine numerous or
lengthy documents may prove time-consuming, expensive and delay the resolution
of the litigation. Where necessary to the proper determination of the claim for
privilege, it must be undertaken. But I would not lay down an absolute rule
that as a matter of law, the judge must personally inspect every document at
issue in every case. Where the judge is satisfied on reasonable grounds that the
interests at stake can properly be balanced without individual examination of
each document, failure to do so does not constitute error of law.
[20]
Given
the relatively few documents at issue, it was a fundamental procedural error
for the Adjudicator not to examine the documents before making a ruling. I am
advised by Counsel for BMO that a booklet containing copies of these documents
had been offered to the Adjudicator for this purpose.
[21]
The
memorandum of argument filed by BMO with the Adjudicator raises privilege on
two grounds; solicitor-client privilege, and litigation privilege. The decision
of the Adjudicator deals only with the claim for litigation privilege. It does
not deal with the claim for solicitor-client privilege, save as to say, at paragraph
2 of the Order that BMO may redact; but apparently, only from internal
correspondence, portions of those documents relating to solicitor-client
privilege or “legal advice privilege”. The reasons do not clarify what is meant
by “legal advice privilege”.
[22]
It
is clear in reading the BMO memorandum of argument filed with the Adjudicator
that solicitor-client privilege, as well as litigation privilege, was asserted with
respect to internal correspondence as well as in respect of investigative notes
and summaries (reports) of investigative interviews. The failure of the
Adjudicator to address this assertion is an error that requires a
re-determination.
[23]
As
to litigation privilege, Counsel for BMO raises two issues. One issue is that
the Adjudicator made her decision before hearing the evidence of Devereux, the
lawyer who conducted the interviews, and that such evidence would have informed
her as to the nature and purposes of the interviews in question. The memorandum
filed by BMO with the Adjudicator does not raise this as an issue. I am
informed by Counsel that no objection in this respect; namely, wait for
Devereux’s evidence, was raised orally. I reject BMO’s submission in this
regard.
[24]
The
second issue raised by BMO is that the Adjudicator applied the wrong legal test
in determining litigation privilege. BMO’s Counsel argues that the Adjudicator,
at paragraph 27 of her reasons, stated that the test for determining whether
litigation privilege existed included a consideration as to whether there was a
“reasonable expectation of forthcoming litigation”; whereas, the proper test
was whether litigation was “in reasonable prospect”. Counsel referred to the
decision of the British Columbia Court of Appeal in Hamalainen (Committee
of) v Sippola, [1991], 2 WWR 132, 62 BCLR (2d) 254, in this regard. Wood JA
for the Court in that decision wrote at paragraph 22:
Even in cases where litigation is in reasonable
prospect from the time a claim first arises, there is bound to be a preliminary
period during which the parties are attempting to discover the cause of the
accident on which it is based. At some point in the information gathering
process the focus of such an inquiry will shift such that its dominant purpose
will become that of preparing the party for whom it was conducted for the
anticipated litigation. In other words, there is a continuum which begins with
the incident giving rise to the claim and during which the focus of the inquiry
changes. At what point the dominant purpose becomes that of furthering the
course of litigation will necessarily fall to be determined by the facts
peculiar to each case.
[25]
The
differences between “reasonable expectation” and “reasonable prospect” may be
slight and nuanced. Nevertheless, since I will be sending the matter back for
re-determination, I ask that the Adjudicator have regard to a reasonable
prospect of litigation.
[26]
Counsel
for BMO took further exception to the Adjudicator’s Order requiring redaction
of documents. He relied on the decision of Justice de Montigny of this Court in
Slansky v Canada (Attorney General), 2011 FC 1467, at paragraph 60:
60 The
Prothonotary concluded at paragraph 30 of her decision that "it is
possible to sever the "fact-gathering" investigative work
product" prepared by counsel from the privileged legal advice contained in
the Report (Slansky, above). She based her conclusion on the assumption that
the "facts are separate and distinct from the advice given on legal issues
that is privileged" (Slansky, above at para 30). Such an assumption is not
only unwarranted and without any foundation in the jurisprudence, but it is
completely at odds with the "as close to absolute as possible"
protection to be afforded to the solicitor-client privilege. This is to say
nothing of the practical difficulties one would encounter, in many instances,
if an opinion had to be parsed to distinguish between its factual and legal
components.
[27]
While
in some cases redaction may be difficult, it is commonplace in many cases that come
before this Court. I do not find as being sound any objection to the Order
simply on the basis that it affords BMO the opportunity to redact privileged
material from certain documents that it may produce.
EVIDENCE
[28]
A
short note about the evidence filed by BMO in support of this application.
There were two affidavits; one, of a solicitor in the office of Counsel, who
appeared before me. That solicitor appeared at the hearing and wished to be
recorded as co-Counsel appearing for BMO. I would not allow that solicitor to
appear as Counsel. Rule 82 of this Court prohibits a solicitor from serving
both as an affiant and as Counsel without leave of the Court. I allowed the
affidavit to remain in the record, but refused to enter the solicitor’s name as
one of the Counsel for BMO.
[29]
The
second affidavit filed by BMO is that of Devereux, whose name appears earlier
in these Reasons. At paragraphs 3 and 6 of that affidavit, Devereux testifies
as to the “dominant” and “secondary” purpose of certain interviews and
communications. This was not evidence before the Adjudicator, and I had no
regard to it in making my determination on this judicial review.
CONCLUSION AND
COSTS
[30]
In
conclusion, I have heard and determined this judicial review notwithstanding
that it involves an interlocutory decision of the Adjudicator. It raises
fundamental issues as to privilege.
[31]
I
will set aside the Order of the Adjudicator of September 18, 2012 and require
that the Adjudicator re-determine the matter, and , in particular:
i.
review
the documents themselves;
ii.
consider
the issue of solicitor-client privilege applicable to the documents; and
iii.
consider
the issue of litigation privilege on the basis of “reasonable prospect” of
litigation
[32]
Counsel
for each of the parties, in requesting costs, did so on a basis common to the
practice in Ontario courts in seeking a lump sum at a rather high level having
regard to the levels usually assessed in the Federal Court. They each asked for
$10,000.00. I view this as too high, having regard to costs usually awarded in
this Court in matters of this kind. I fix the costs at $5,000.00.
JUDGMENT
FOR
THE REASONS PROVIDED:
THIS
COURT’S JUDGMENT is that:
1.
The
application is allowed;
2.
The
Adjudicator’s Order of September 18, 2012 is set aside;
3.
The
Adjudicator shall re-determine the question of privilege respecting the
documents at issue having regard to the Reasons herein; and
4.
The
Applicant is entitled to costs fixed in the sum of $5,000.00
"Roger T.
Hughes"
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