[1] This is an appeal from the Motions Judge's decision that Mr. David Marler, the solicitor of record for N.M. Paterson & Sons Limited in an action against the St. Lawrence Seaway Management Corporation (the "Seaway"), was in contempt of court for disclosing to the media information obtained from the Seaway during the discovery process, thereby breaching the implied obligation of confidentiality.

[2] The respondent Seaway also cross-appeals from the Motions Judge's decision that Mr. Marler should not be required to pay the Seaway's full costs of prosecuting the contempt charge.

II. Background

[3] The contempt motion arose out of an underlying action by N. M. Paterson & Sons Limited for damages against the Seaway on the grounds that a Seaway employee lowered a bridge onto its boat.

[4] As part of the discovery process in this underlying action, the Seaway provided Mr. Marler, as solicitor for N. M. Paterson & Sons Limited, with, inter alia, a document referred to as an occurrence report. This document contained the statement of the person who was operating the bridge at the time of the incident, Mr. Rheo Dagenais, as to what happened at this time. In addition, Mr. Marler conducted a discovery examination of Mr. Pasquale Vincelli, the Director of Marine and Operational Services for the Seaway.

[5] There is no dispute that after receiving this information through the discovery process, Mr. Marler read a copy of the occurrence report as well as part of Mr. Vincelli's discovery evidence to a newspaper reporter, and that this reporter subsequently published the information.

[6] After the information was published, the Seaway brought a motion for contempt against Mr. Marler. The precise charge against Mr. Marler was as follows:

The acts which David F.H. Marler is charged is that he, by his conduct described below, breached the implied undertaking rule imposing confidentiality on information obtained from a document produced by the defendant for examinations for discovery, and on information from the oral examinations for discovery of the defendant's discovery witness in this action:

i) In disclosing the contents of a document produced by the defendant on discovery being an "occurrence report' (which is an internal document to the defendant) to the media which was the subject of an article published in the St. Catharines Standard newspaper on August 3, 2002. The information in the occurrence report was completed and the document signed by one Rheo Dagenais, at all material times being a Seaway employee, on August 13, 2001, who prepared this report for the defendant's internal purposes in respect of the Welland Canal incident being the subject of the claim herein. The said document was a discovery production delivered by the defendant to David F.H. Marler's office in Mr. Marler's capacity as counsel for the plaintiff herein;

ii) In disclosing certain aspects of the oral discovery evidence of the defendant's discovery witness, Mr. Pat Vincelli, to the media, which information was published in the St. Catharines Standard and the Niagara Falls Review in newspaper articles on August 9, 2002.

[7] Since there was no dispute that Mr. Marler received the information at issue during the discovery process and that he subsequently disclosed this information to a newspaper reporter, the key issue at the contempt hearing was whether or not the information was otherwise publicly available when Mr. Marler disclosed it, such that the implied obligation of confidentiality no longer applied. At the hearing, Mr. Marlier tried to enter into evidence a contemporaneous videotape of the collision between the bridge and the boat in order to show that the information contained in the occurrence report was already available to the public. The Motions Judge declined to enter the videotape into evidence on the grounds that it was not relevant to the issue of whether the occurrence report was publicly available.

[8] At the conclusion of the hearing, the Motions Judge found, beyond any reasonable doubt, that the elements of the charge against Mr. Marler had been established, and that the discovery information disclosed by Mr. Marler was not accessible to the public at the relevant time. The Motions Judge, however, declined to apply the general rule that Mr. Marler should pay the Seaway's costs on a solicitor and client basis, and instead ordered Mr. Marler to pay half of the Seaway's costs, in the amount of $37,500. The Motions Judge also noted that he accepted Mr. Marler's evidence that he was ignorant of the implied obligation of confidentiality at the time that he breached the rule.

[9] Mr. Marler appeals the decision of the Motions Judge on four main grounds: that he incorrectly amended the original charge against Mr. Marler; that he erred by not allowing the videotape into evidence; that the particulars of the charge were not established; and that he incorrectly interpreted the jurisprudence regarding the implied undertaking rule.

III. Analysis

The appeal

[10] Mr. Marler's first argument for overturning the Motions Judge's decision was that he erred by inappropriately amending the original contempt charge against Mr. Marler. According to Mr. Marler, the original charge alleged, inter alia, that Mr. Marler breached the implied obligation of confidentiality by "disclosing the contents of a document produced by the defendant on discovery being an 'occurrence report.'" [emphasis added] However, during the hearing, the Motions Judge effectively amended the charge by stating that "it is not the information that was in the report that is relevant; it is the fact that the information was in the report and that the report was in the files of the Defendant corporation which is important."

[11] In my opinion, the Motions Judge did not amend the charge against Mr. Marler. The statement referred to by Mr. Marler above, which was made during the course of the hearing, is simply the Motions Judge's reasons as to why he was excluding the videotape from evidence. He was not in any way amending the formal charge against Mr. Marler or even deciding whether or not the charge had been made out. The statement of the Motions Judge, in its full context, was as follows:

I am not persuaded that the Court would be assisted in its task today by looking at what is said to be a contemporary videotape of the accident which lies at the heart of the action between the Plaintiff and the Defendant. The Court today is inquiring only into a charge of contempt alleged to have consisted of two breaches of the implied undertaking of confidentiality by the divulgation by solicitor of record of a report in the files of the Defendant corporation and by certain answers given by the witness who was produced for discovery by the Defendant corporation.

In my view, if the case is made out that such divulgation took place, it is not the information that was in the report that is relevant; it is the fact that the information was in the report and that the report was in the files of the Defendant corporation which is important.

It is impossible to accept that Mr. Marler was misled as to the nature of the charges against him. In any case, the original charge that Mr. Marler disclosed "the contents of a document produced by the defendant on discovery being an 'occurrence report'" was clearly established based on the evidence. There was no dispute that Mr. Marler received the occurrence report through the discovery process and that he read the contents of this report to a newspaper reporter. The only issue was whether Mr. Marler should be excepted from the implied obligation of confidentiality because the information was otherwise publicly available.

[12] During the hearing of the appeal, Mr. Marler also argued that before the Motions Judge was entitled to find that the implied obligation of confidentiality had been breached, the respondent was required to affirmatively establish that the occurrence report was not publicly available, and that the respondent had failed to meet this burden. I do not agree that the respondent had this burden. The elements of a breach of the implied obligation of confidentiality consist of receiving information from another party through the discovery process and then disclosing that information to a third party prior to the trial. The fact that the information is not otherwise available to the public is not an element of the offence but rather a defence to the charge of breaching the implied obligation of confidentiality. In The Law of Evidence in Canada, 2^nd ed. (Toronto: Butterworths, 1999) at 62, John Sopinka et al state:

If, however, the accused wishes to raise a defence which does not simply constitute a denial of an element of the offence, an evidential burden is imposed on the accused. For example, if the accused wishes the jury to consider the defence of a mistaken belief in consent for the crime of sexual assault, the criminal law allocates an evidential burden to the accused to adduce a factual basis for this defence.

I also note that Mr. Marler's argument would place an impossible burden on the party attempting to establish that the implied obligation of confidentiality has been breached. That party would have to prove a negative by establishing that the document was not publicly accessible from any source whatsoever. Accordingly, once the necessary elements of the charge have been made out, the onus is on the person alleged to have breached the implied obligation of confidentiality to establish a defence that the information was otherwise accessible to the public. In my opinion, this is not an onerous burden. After all, before a person is justified in disclosing information received during the discovery process to a third party, that person must have knowledge that the information is otherwise publicly available. It should be relatively easy for that person to point to the source from which the information was accessible.

[13] Mr. Marler then argued that even assuming that he had the burden to establish that the information was available from another source, the Motions Judge erred by refusing to allow him to introduce the videotape for this purpose. In my opinion, the Motions Judge was correct to refuse to allow the videotape into evidence. The videotape could not possibly have established that the occurrence report was publicly available because the video was taken at the time of the incident, two days before the report even existed. Accordingly, the video could not possibly have even referenced the occurrence report. Furthermore, the occurrence report was the bridge operator's personal account of what happened at the time of the collision. On the other hand, the videotape was simply a contemporaneous picture of the collision and was not alleged to contain any statements of the bridge operator.

[14] During the hearing, Mr. Marler also attempted to argue that the occurrence report was in fact accessible to the public because it was prepared for a Transportation Safety Board of Canada ("TSB") investigation, and would have been accessible to the public through the Access to Information Act, RS 1985, c. A-1. However, this argument is very easily addressed by the simple fact that there is no evidence on the record that the TSB ever had possession of the occurrence report.

[15] Furthermore, contrary to Mr. Marler's arguments, all of the particulars of the charge were established. Specifically, Mr. Marler argued that the respondent did not establish that the occurrence report was an internal Seaway document or that Rheo Dagenais was at all material times a Seaway employee who prepared the occurrence report for the Seaway's internal purposes. First, the evidence, taken collectively, clearly establishes that the occurrence report was an internal Seaway document prepared for internal Seaway purposes. At the contempt hearing, the "will say" statement of Mr. Vincelli was entered into evidence and accepted by Mr. Marler. This statement of Mr. Vincelli indicated that he was responsible for investigating all serious Seaway accidents and that he was familiar with the Seaway's policies and procedures involving the investigation of accidents. Further, his will say statement provided that:

The St. Lawrence Seaway Management Corporation requires all operators of bridges to file an Occurrence Report on a timely basis. It is the desire of The St. Lawrence Seaway Management Corporation to encourage a frank assessment of any incident. The Occurrence Report is intended to facilitate such investigations and further the aim of developing policies to prevent future incidents. [emphasis added]

Furthermore, the Statement of Agreed Facts indicates that William Sharpe, the solicitor for Rheo Dagenais, "accurately recorded the oral statement [of Mr. Dagenais] by printing the statement on an Occurrence Report form." The Statement of Agreed Facts also provides that William Sharpe then delivered the Occurrence Report by facsimile from his office to The St. Lawrence Seaway Management Corporation in St. Catharines, Ontario. All of this evidence collectively establishes that the occurrence report of Mr. Dagenais was an internal Seaway document prepared for the Seaway's internal purposes. I also note that the Motions Judge expressly found that both the occurrence report and the information provided by Mr. Vincelli during the examination for discovery were considered to be and were treated as confidential by the Seaway.

[16] Second, the evidence clearly established that Rheo Dagenais was a Seaway employee at all material times. The most obvious evidence of Mr. Dagenais' status as an employee of the Seaway at the material time of the accident is his statement on the occurrence report form, which was as follows:

I was called in for work around 2 p.m. August 11 for the evening shift... I worked the bridge with nothing odd happening.. I believe I raised the bridge 2 times before the 'WINDOC'... Lock 8 called me that the WINDOC was downbound. I heard the ship detector at Port Robinson. I raised the bridge on normal electric power. I went to the north sides of the control room and looked out. It was still light out and I could see the canal. I saw the ship was almost clear. I went to the control panel and gave the siren and started to lower the bridge. I stood at the control panel. I didn't hear or see anything unusual until I heard the sound of the ship hitting the bridge. I do not remember anything after that until the control phone rang. I knew the voice of a person at the Seaway Corporation but I am not sure who it was. Seaway people then came to the control room.

Clearly, Mr. Dagenais was an employee of the Seaway; he was the person who was operating the bridge at the time of the collision.

[17] Finally, Mr. Marler argued that the Motions Judge erred by misinterpreting the Supreme Court of Canada's decision in Lac d'Amiante du Québec Ltée v. 2858-0702 Québec Inc., [2002] 2 S.C.R. 743, regarding the implied obligation of confidentiality during the discovery process. According to Mr. Marler, in this case, the Supreme Court held that if a document obtained during discovery is central to the case and will inevitably be used at trial, then the document may be disclosed at the discovery stage. Mr. Marler's interpretation of the Lac d'Amiante case is entirely without merit, and if accepted, would render the implied rule of confidentiality virtually meaningless. The Supreme Court's decision in Lac d'Amiante clearly establishes that documents or information obtained during the discovery process cannot be disclosed until they actually become part of the court record at trial. This is clear from paragraphs 43 and 64 of the reasons of Lebel J.:

When the case reaches the trial stage, the effectiveness of the application of this rule is no doubt limited and temporary; examination on discovery is of course only one step in the conduct of a civil trial. If the adverse party chooses to use the evidence or information obtained on discovery at the hearing on the merits and files it in the court record for that purpose, any expectation of confidentiality disappears.

...

When an examination on discovery is held, confidentiality is weakened. The information becomes accessible to the adverse party. However, it does not become a part of the court record and does not enter into the proceedings between the parties as long as the trial has not commenced and the adverse party has not entered it in evidence. It is therefore appropriate to recognize that the examination is subject to an obligation of confidentiality, which is binding on the party who obtains the information, for the protection of the opposing party. That confidentiality governs the stage prior to the court record being created, in respect of both the opposing party and the court, which in this context must be able to rely on the proper application of the rule of confidentiality... [emphasis added]

The cross-appeal

[18] The normal rule is that when a private party successfully prosecutes a contempt charge, the Court will order the contemnor to pay that party's costs on a solicitor and client basis. The rationale for this rule is that a party who assists the Court in ensuring the orderly administration of justice should not have to suffer costs. See Pfizer v. Apotex, (1998) 162 F.T.R. 169. The Motions Judge was clearly aware of this general principle and referred to it in his reasons. However, he also stated that no order, even an order for costs which is in the nature of a penalty, should be so burdensome as to be wholly unreasonable. Taking this into account, the Motions Judge ordered Mr. Marler to pay the respondent approximately half of its costs, in the amount of $37,500. Under Rule 467(1) of the Federal Court Rules, 1998, the Motions Judge had the discretion to do this, and there is no basis for interfering with this decision.

IV. Conclusion

[19] Both the appeal and cross-appeal should be dismissed with costs.

"J. EDGAR SEXTON"

J.A.

"I agree

Robert Decary j.a."

"I agree

B. Malone J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-678-02

STYLE OF CAUSE: N.M. PATERSON & SONS LIMITED

Appellant

and

THE ST. LAWRENCE MANAGEMENT CORPORATION

Respondent

PLACE OF HEARING: TORONTO, ONTARIO

DATE OF HEARING: MAY 17, 2004

REASONS FOR JUDGMENT: SEXTON J.A.

CONCURRED IN BY: DÉCARY and MALONE JJ.A.

DATED: May 28, 2004

APPEARANCES:

FOR THE APPELLANT

FOR THE RESPONDENT

SOLICITORS OF RECORD:

FOR THE APPELLANT

FOR THE RESPONDENT

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N. M. Paterson & Sons Ltd. v. The St. Lawrence Seaway Managment Corp., 2004 FCA 210

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2004 FCA 210