Docket:
T-219-17
Citation:
2017 FC 382
Ottawa, Ontario, April 19, 2017
PRESENT: THE CHIEF JUSTICE
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Docket: T-219-17
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BETWEEN:
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RAKUTEN KOBO
INC.
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Applicant
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and
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THE
COMMISSIONER OF COMPETITION, HACHETTE BOOK GROUP CANADA LTD., HACHETTE BOOK
GROUP, INC., HACHETTE DIGITAL, INC., HOLTZBRINK PUBLISHERS, LLC AND SIMON
& SCHUSTER CANADA, A DIVISION OF CBS CANADA HOLDINGS CO.
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Respondents
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ORDER AND REASONS
I.
Introduction
[1]
In this Motion, Rakuten Kobo Inc. [Kobo] seeks
three principal types of relief.
[2]
First, it seeks an Order staying its Application
for Judicial Review [the Application] in the within proceeding pending the
final disposition of another motion, brought by HarperCollins Publishers L.L.C.
and HarperCollins Canada Limited [collectively, HarperCollins], before the
Competition Tribunal [the Tribunal]. In that motion, HarperCollins requests,
among other things, that an application filed by the Commissioner against it
pursuant to section 90.1 of the Competition Act, RSC 1985, c C-34 [the
Act], be dismissed summarily [the Motion for Summary Dismissal].
[3]
Second, Kobo seeks an Order requiring the
Commissioner of Competition [the Commissioner] to produce unredacted versions
of all documents that the Commissioner has disclosed in connection with Kobo’s
Application, pursuant to Rule 317 of the Federal Courts Rules, SOR
98/106. As explained in greater detail below, that Application concerns
consent agreements [the CAs] that the Commissioner has entered into with the
other Respondents identified in the style of cause above [the Respondent
Publishers].
[4]
Third, Kobo seeks an Order varying the timetable
in its Application to permit it to file amended or supplemental materials, once
the above-mentioned unredacted documents have been produced.
[5]
For the reasons that follow, this Motion will be
granted in part. Kobo’s Application will be stayed until the Tribunal has
issued its decision in respect of the Motion for Summary Dismissal. Given that
the parties’ submissions will have been served and filed by that time, it is
expected that the hearing of the Application will take place very shortly after
the issuance of the Tribunal’s decision, unless Kobo withdraws the Application,
following the issuance of the Tribunal’s decision and any steps that may be
taken as a consequence thereof, in relation to the CAs.
[6]
Kobo’s requests for an Order requiring the
Commissioner to produce to Kobo unredacted versions of all of the documents in
respect of which he continues to assert a claim of privilege, and for leave to
file amended or supplementary material, will be denied.
II.
Background
[7]
The CAs relate to a change by the Respondent Publishers
of general interest fiction and non-fiction electronic books [E-books] from a
wholesale distribution model to an agency distribution model. As a result of
that change, retail price competition in the markets for E-books in Canada is
alleged to have been restricted. The CAs were registered with the Tribunal in
February of this year. Each of the Respondent Publishers has entered into a
separate CA with the Commissioner.
[8]
In its underlying Application in this
proceeding, Kobo seeks to challenge the CAs on jurisdictional grounds.
[9]
On March 8, 2017, I issued an Order, on consent,
staying the implementation of the CAs until the fifth business day following
this Court’s determination of Kobo’s Application.
[10]
The recitals in each of the CAs state that the
Commissioner has concluded that the Respondent Publisher in question
implemented in Canada an arrangement that was entered into in the United States
with at least one other competing publisher, in relation to the sale of E-books
in both of those countries [the Arrangement]. Among other things, those
recitals also state that the Commissioner has concluded that the Arrangement
included provisions that restricted the ability of E-book retailers to discount
the retail prices of E-books; and that the Arrangement prevents or lessens or
is likely to prevent or lessen, competition substantially in the retail market
for E-books in Canada, within the meaning of section 90.1 of the Act.
[11]
Broadly speaking, the CAs are directed towards
distribution agreements that the Respondent Publishers have entered into with retailers
of E-books. Among other things, the CAs prohibit the Respondent Publishers from
directly or indirectly restricting, limiting or impeding an E-book retailer’s
ability to set, alter or reduce the retail price of any E-book for sale to
consumers in Canada, or to offer price discounts or any other form of promotion
to encourage consumers in Canada to purchase one or more E-books. The CAs also
prohibit the Respondent Publishers from entering into an agreement with any
E-book retailer that has one of those effects. These prohibitions apply for
nine (9) months, commencing no later than 120 days following the registration
of the CAs.
[12]
Certain other terms in the CAs prohibit the Respondent
Publishers from entering into agreements with E-book retailers relating to the
sale of E-books to consumers in Canada that contain particular types of
most-favoured nation clauses [Price MFN Clauses], for a period of three years from
the date of the registration of the CA.
[13]
In addition, the CAs require the Respondent
Publishers to take steps to terminate, and not renew or extend, existing
agreements with E-book retailers that restrict price discounting or contain a
Price MFN Clause. In lieu of such action, the CAs permit the Respondent Publishers
to take certain alternative steps to address the Commissioner’s concerns.
[14]
The prohibitions in the CAs are essentially the
same as the prohibitions that were contained in an earlier single consent
agreement that the Commissioner entered into with the Respondent Publishers and
HarperCollins in 2014 [the Initial CA]. However, the Initial CA was rescinded
by the Tribunal after it was found to have been deficient in certain respects.
[15]
In this latter regard, the Initial CA did not
provide the Tribunal with a sufficient understanding of the subject matter of
the impugned Arrangement to satisfy itself that the prohibitions in the Initial
CA pertained to terms of the Arrangement, as contemplated by paragraph 90.1(1)(a)
of the Act. It also did not sufficiently address whether the Arrangement was
existing or proposed at that time; whether two or more parties to that Arrangement
were competitors; or whether that Arrangement prevented or lessened, or was
likely to prevent or lessen, competition substantially. In this latter regard,
the Initial CA simply referred to competition having been substantially
prevented or lessened in the past.
[16]
The Tribunal’s rescission of the Initial CA was without
prejudice to the ability of the Commissioner to enter into a new consent
agreement with the Respondent Publishers, based on conclusions that he
may reach regarding the six elements of the reviewable conduct described in subsection 90.1(1)
of the Act.
[17]
The CAs that are the subject of the within
Application by Kobo presumably were intended to respond to the above-mentioned
deficiencies in the Initial CA. However, while HarperCollins was a party to the
Initial CA, it apparently declined to enter into a revised consent agreement.
As a consequence, the Commissioner filed a contested application before the
Tribunal against HarperCollins.
[18]
In its Application in the within proceeding,
Kobo has raised three jurisdictional grounds of review. First, it submits that the
Commissioner acted without jurisdiction by entering into the CAs to remedy a
conspiracy that was entered into in the U.S., not in Canada, and that was
resolved by U.S. Courts and antitrust enforcers in 2012–2013. Second, Kobo
asserts that the Commissioner acted without jurisdiction by entering into the
CAs to remedy “an arrangement” that never existed. Third, Kobo maintains that,
if such arrangement did once exist, it was no longer “existing or proposed,” as
required by section 90.1 of the Act, at the time the CAs were entered
into.
[19]
The first and third of the above-mentioned
jurisdictional challenges brought by Kobo have also been advanced by
HarperCollins before the Tribunal, in its response to the Commissioner’s application
as well as in its Motion for Summary Dismissal. However, whereas Kobo asserts
that it is the Commissioner who acted without jurisdiction,
HarperCollins submits that it is the Tribunal that lacks jurisdiction.
[20]
Given that Kobo’s Application is scheduled to be
heard on tomorrow, this Motion was heard on an urgent basis last Thursday, on
the eve of the Easter holiday period, after the Commissioner filed his response
earlier in the week.
[21]
HarperCollins’ Motion for Summary Dismissal
before the Tribunal is scheduled to be heard on May 3, 2017.
III.
Kobo’s Request for a Stay of its Application
A.
Relevant Legislation
[22]
Subsection 50(1) of the Federal Courts
Act, RSC 1985, c F-7 states:
50 (1) The Federal Court of Appeal or the
Federal Court may, in its discretion, stay proceedings in any cause or matter
(a) on the ground that the claim is being
proceeded with in another court or jurisdiction; or
(b) where for any other reason it is in the
interest of justice that the proceedings be stayed.
B.
General Principles
[23]
This Court will not lightly delay a matter (Mylan
Pharmaceuticals ULC v AstraZeneca Canada, Inc, 2011 FCA 312, at para 5
[Mylan]).
[24]
Pursuant to a line of jurisprudence that has
developed in relation to paragraph 50(1)(a) and is relied upon by the
Commissioner, a stay should only be granted in the clearest of circumstances. Among
other things, that jurisprudence holds that the party seeking the stay must
demonstrate that the continuance of the proceeding in respect of which the stay
is sought would cause prejudice or injustice to that party, and would not cause
an injustice to the other party or parties to the proceeding. In addition,
unless there is a risk of imminent adjudication in two different forums, the
Court will be reluctant to issue a stay where the parties to parallel
proceedings are not identical, the jurisdiction of the two courts in question
is different, or where the causes of action being asserted are different (GDC
Gatineau Development Corporation v Canada (Public Works and Government
Services), 2009 FC 1295, at paras 4–7; Jazz Air LP v Toronto
Port Authority, 2009 FC 253; Advanced Emissions Technologies
Ltd v Dufort Testing, 2006 FC 794, at paras 9–10; White v EBF
Manufacturing Ltd, [2001] FCJ No 1073 (QL), at para 3 (FCTD)).
[25]
However, more recent jurisprudence involving
parallel proceedings in different courts holds that the Court must simply ask
itself “whether, in all of the circumstances, the
interests of justice support the [proceeding] being delayed” (Mylan,
above, at para 14). Indeed, the Commissioner himself stated that the “interests of justice” would be “best served if this Court resolves [the issues that Kobo has
raised in its Application] in accordance with the original timetable.”
[26]
In any event, the Court has broad discretion in
considering a request for a stay of its proceedings, and is not limited to
considering the factors mentioned in paragraph 24 above (1395804
Ontario Ltd (Blacklock’s Reporter) v Canada (Attorney General), 2016 FC 719,
at paras 38–41 [Blacklock’s]).
C.
Analysis
[27]
Kobo submits that it would be in the interests of
justice for the hearing of its Application in the within proceeding to be
stayed pending the final disposition of HarperCollins’ Motion for Summary
Dismissal.
[28]
In brief, Kobo asserts that the Tribunal’s
decision in respect of the Motion for Summary Dismissal will inform one or more
of the key jurisdictional issues that have been raised in its Application
before this Court, and that to “continue with both
proceedings at the same time would give rise to the prospect of inconsistent
findings and a waste of resources, both of the Court and the Tribunal, and of
the parties.” Kobo adds that the Tribunal should be permitted to
determine the scope of its jurisdiction, before the Court does so, and that it
would be more efficient for the Tribunal to make that determination, because the
evidentiary issues in dispute on HarperCollins’ Motion for Summary Dismissal
are far less than those in dispute in Kobo’s Application before this Court. Kobo
also maintains that there would be no prejudice to the Commissioner or to the
public if the stay is granted.
[29]
Given the limited nature of the issues to be resolved
on the Motion for Summary Dismissal, Kobo maintains that “it can be anticipated that this is a stay that will be
measured in weeks, not years.”
[30]
The Commissioner opposes Kobo’s request for a
stay on several grounds.
[31]
I am not persuaded that the Commissioner has
established the existence of any of those grounds, each of which I will address
in order below.
[32]
First, the Commissioner submits that Kobo has
not adduced any evidence to demonstrate that it will be harmed if a stay of the
hearing of its Application is not granted. In addition, the Commissioner
maintains that the issuance of the stay would cause harm to the public interest
because it would delay the resolution of the matters at issue in the judicial
review proceedings before this Court. The Commissioner states that such delay
will “deprive the public of at least the possibility of
a market where E-book retailers have the ability to compete on the basis of
price,” for months, and potentially longer.
[33]
On the particular facts of this case, those
considerations do not merit significant weight in favour of denying the stay
that Kobo has requested. With respect to prejudice to Kobo, it is readily
apparent that, in the absence of a stay of the hearing of its Application, Kobo
and the Commissioner would have to incur significant time and expense
associated with proceedings before the Court and the Tribunal that are
scheduled to be heard within a very short period of time of each other—less
than two weeks. The taxpaying public would also have to incur the significant
expense associated with hearings before the Court and the Tribunal. In my view,
requiring both proceedings to proceed almost simultaneously would not be an
effective use of scarce public and judicial resources and would not be
consistent with the spirit of Rule 3 of the Federal Courts Rules,
which refers to the desirability of securing the just, most expeditious and
least expensive determination of every proceeding on its merits (Coote v
Lawyers' Professional Indemnity Company, 2013 FCA 143, at paras 12–13; Turmel
v Canada, 2016 FCA 9, at para 17; Blacklock’s, above; Korea
Data Systems (USA), Inc v Aamazing Technologies Inc, [2012] OJ No 5195 (QL),
at para 19 (CA)).
[34]
Insofar as the harm to the public that the
Commissioner alleges would be associated with a granting of the stay is
concerned, it is important to note that the prohibitions in the CAs are time-limited
and of very short duration. As noted at paragraphs 11 and 12 above, the
prohibitions with respect to the restriction of discounting by E-book retailers
would be in force for only nine months, while the prohibitions with respect to
Price MFN Clauses would be in force for three years. That will not change if
the implementation of the CAs is deferred. Stated differently, in contrast to a
situation in which the period of time during which the public would
benefit from a remedy under the Act would be reduced by a stay, the period of time
during which the prohibitions set forth by the CAs would be in force would not
change whatsoever. I note that this was one of the reasons why Rennie J., as he
then was, declined to find that the balance of convenience favoured the
Commissioner, when he considered Kobo’s request for a stay of the
implementation of the Initial CA (Kobo Inc v The Commissioner of Competition,
2014 Comp Trib 2, at para 43).
[35]
The Commissioner further submits that the
parties to the proceedings before the Tribunal and the Court are different, and
that the relief being sought before the Tribunal and the Court is also
different. As a result, he asserts that the risk of inconsistent findings being
reached by the Tribunal and the Court is very low. I disagree.
[36]
Notwithstanding the differences that the
Commissioner has identified in the proceedings before the Tribunal and the
Court, respectively, there is a non-speculative risk of findings being made in
respect of one or more issues in those proceedings that could well be perceived
by the parties or the public to be inconsistent or difficult to reconcile (Blacklock’s,
above, at paras 52–53). For example, it is objectively possible that the
Tribunal could determine that there is no genuine issue for trial because the
anti-competitive arrangement to which HarperCollins is alleged to have been a
party was entered into in the United States; while the Court could conclude
that it was not unreasonable for the Commissioner to have entered into the CAs,
even though the impugned Arrangement was entered into outside Canada.
[37]
In my view, the parties and the public could
very well have difficulty reconciling such apparently differing conclusions.
This is so even though the parties’ legal counsel would understand that the
Court’s determination of the reasonableness of the Commissioner’s
interpretation of his jurisdiction in respect of foreign arrangements would not
represent the Court’s view of the correctness of that interpretation.
[38]
In providing the example set forth above, I
should not be taken to have accepted the Commissioner’s submission that this
Court should review the issues that Kobo has raised in its Application on a
reasonableness standard.
[39]
It is preferable for the Court to have the
benefit of the Tribunal’s determinations regarding the jurisdictional issues
that have been raised in both proceedings before addressing those issues itself
(Alberta (Information and Privacy Commissioner) v Alberta Teachers’
Association 2011 SCC 61, at paras 24–25; Alberta (Education) v
Access Copyright, 2010 FCA 198, at para 70, rev’d on other
grounds, 2012 SCC 37, at paras 10–11, 59–60; Ontario (Liquor Control
Board) v Vin de Garde Wine Club, 2013 ONSC 5854, at para 48). Among
other things, this may well facilitate the Court’s determination of these
issues, and reduce the scope for determinations that are perceived to be
inconsistent or difficult to reconcile. To the extent that this is ultimately
achieved, it should, in turn, reduce the potential for additional litigation in
respect of the CAs.
[40]
In an apparent effort to reduce the mischief
that would be associated with the issuance of decisions by the Court and the
Tribunal that are inconsistent or difficult to reconcile, the Commissioner
suggested that the Court could elect to withhold its decision pending the issuance
of the Tribunal’s ruling on HarperCollins’ Motion for Summary Dismissal.
However, I am not persuaded that it would be prudent to proceed down a path
where there would remain a non-speculative possibility that the Court would
still wind up being in a position of issuing a decision that would give rise to
this very mischief. If the Commissioner’s thought is that the Court could, at
that point in time, avoid the mischief in question by permanently refraining
from issuing its decision, I consider that this would be unfair to Kobo and the
Respondent Publishers, who would by then have incurred the time and expense of
participating in a hearing on Kobo’s Application.
[41]
I will simply add in passing that I agree with
Kobo that the Commissioner’s jurisdiction under section 105 of the Act is
derivative of the Tribunal’s jurisdiction, such that if the Tribunal has no
jurisdiction in respect of a particular conduct, neither does the Commissioner
(Kobo Inc v Commissioner of Competition, 2014 Comp Trib 14, at paras
76–77, 91, 124). As a result, I do not attribute much significance to the fact
that it is the Tribunal’s jurisdiction that is at issue in the Motion
for Summary Dismissal, whereas it is the Commissioner’s jurisdiction
that is at issue in Kobo’s Application before this Court.
[42]
In summary, after balancing the all of
considerations discussed above, I have concluded that it would be appropriate
to stay the hearing of Kobo’s Application in the within proceeding for the
short period of time that it is likely to take the Tribunal to hear and issue a
decision in respect of HarperCollins’ Motion for Summary Dismissal.
[43]
In my view, the potential adverse consequences on
the Commissioner and the public that may be associated with a short delay in
the resolution of the issues that Kobo has raised in its Application are very
minor in nature. Those consequences are much less significant than, and are
considerably outweighed by, the potential adverse consequences that may be
associated with this Court proceeding to a hearing of Kobo’s Application less
than two weeks before the Motion for Summary Dismissal will be heard by the
Tribunal. The latter consequences include the potential for inconsistent or
difficult to reconcile decisions of the Court and the Tribunal, the potential
waste of scarce public and judicial resources, and the loss of an opportunity
for the Court and the parties to benefit from the Tribunal’s consideration of
the two jurisdictional issues that are common in the two proceedings. In
aggregate, these potential adverse consequences considerably outweigh the very
minor potential adverse consequences that would be associated with failing to proceed
to a hearing on Kobo’s Application tomorrow.
[44]
Stated differently, this is a clear case for the
issuance of a short stay. It would also be in the interests of justice that the
hearing of Kobo’s Application be stayed for a short period of time.
[45]
In its Notice of Motion and written submissions,
Kobo requested that its Application be stayed pending the “final” disposition of
HarperCollins’ Motion for Summary Dismissal. This suggests that Kobo may be
seeking to have its Application stayed until a determination has been made in
respect of any appeal(s) that may be taken of the Tribunal’s decision.
[46]
However, Kobo did not refer in its written or
oral submissions to potential appeals of the Tribunal’s decision. On the
contrary, Kobo repeatedly emphasized the “temporary”
nature of the stay that it is seeking, and it stated that “it can be anticipated that this is a stay that will be
measured in weeks, not years.” During the hearing of this Motion, Kobo’s
counsel also undertook to make himself available for a hearing of Kobo’s Application
within that time frame, and in any event before the end of June.
[47]
Another consideration that must be taken into
account in determining the duration of the stay is that the Commissioner and
the Respondent Publishers consented to the underlying stay of the
implementation of the CAs. They did so in order to proceed directly to a
hearing of Kobo’s Application on an accelerated basis, and thereby avoid the
time and costs that would have been associated with having a separate hearing
in respect of Kobo’s request for that stay. With that in mind, I consider that
it would be unfair to them to now stay the hearing of Kobo’s Application for
more than a very short period of time.
[48]
With all of the foregoing in mind, and upon
determining that the hearing of Kobo’s Application would not be proceeding tomorrow,
I revised the schedule for the serving and filing of Responding Records and any
Reply that the Commissioner may wish to file in respect of the Respondent
Publishers’ submissions. I did so to ensure that the hearing of Kobo’s
Application can be scheduled expeditiously, after the Tribunal has issued its
decision in respect of HarperCollins’ Motion for Summary Dismissal.
[49]
Accordingly, I will issue a stay of the hearing
of Kobo’s Application until the issuance of the Tribunal’s decision in respect
of HarperCollins’ Motion for Summary Dismissal.
IV.
Kobo’s Request for Unredacted Versions of Documents
A.
The Parties’ Positions
[50]
The day before the Commissioner was scheduled to
cross-examine the affiant who swore the affidavit filed by Kobo in the within
Application, the Commissioner sent revised copies of four documents to Kobo’s
counsel on an “outside counsel only” basis. Those revised copies revealed newly
unredacted information [the Additional Information], in respect of which the
Commissioner had previously asserted privilege.
[51]
Kobo asserts that the Commissioner deliberately
proceeded in that manner in order to unfairly benefit from disclosing
information that he considered to be helpful to his case after Kobo had filed
its affidavit evidence and after the Commissioner had had an opportunity to
prepare for the cross-examination of Kobo’s affiant, Mr. Michael Tamblyn.
Kobo maintains that this will give rise to “a manifestly unfair” hearing of its
Application.
[52]
Kobo submits that, when the Commissioner waived
privilege over some of the Additional Information, he waived privilege over the
rest of the privileged information in the four documents in question, as well
as over all the other information in respect of which he has asserted a claim
of privilege.
[53]
In support of its position, Kobo relies on the
principle that “waiver of privilege as to part of a
communication will be held to be waiver as to the entire communication”
(S & K Processors Ltd v Campbell Avenue Herring Producers Ltd
(1983), 45 BCLR 218, at para 6 (SC) [S&K]). Kobo maintains
that “[a] party cannot disclose part of the content of a privileged document
and unfairly withhold the rest of it” (Slansky v Canada (Attorney General),
2013 FCA 199, at para 261).
[54]
The Commissioner maintains that he did not
expressly or impliedly waive privilege over any of the other information,
beyond the Additional Information, in respect of which he has asserted
privilege. In addition, he denies that he has disclosed only those parts of the
four documents in question that are favourable to him.
[55]
The Commissioner submits that, in the absence of
a demonstration by Kobo that the Additional Information is misleading, the
Court should not conclude that he has impliedly waived privilege over any other
information in respect of which he has asserted privilege.
B.
Applicable legal principles
[56]
The onus of establishing waiver of privilege
rests with the party asserting the waiver (Smith v Jones, [1999] 1 SCR
455, at para 46; Canada (National Revenue) v Thornton,
2012 FC 1313, at para 26).
[57]
The privileges that the Commissioner has
asserted are solicitor-client privilege, investigative techniques privilege and
public interest privilege, which extends to “a class of documents, created or
obtained during the course of a Competition Bureau investigation” (Canada
(Commissioner of Competition) v Air Canada, 2012 Comp Trib 21, at
para 3 [Air Canada]).
[58]
It is “plainly not the
law that production of one document from a file waives the privilege attaching
to other documents in the same file” (Transamerica Life Insurance Co
of Canada v Canda Life Assurance Co, [1995] OJ No 3886 (QL), at
para 41 (Gen Div) [Transamerica]). The same principle applies to
the waiver of privilege in respect of some, but not all, of the information in
a single document in respect of which privilege has been asserted (Stevens v
Canada (Prime Minister), [1997] 2 FC 759, at para 34 (FCTD)).
[59]
In relying on the passage from S&K
reproduced above, Kobo omits to mention that Justice McLachlin, as she then
was, made it clear that, in cases of partial waiver, the issue of whether there
has been an involuntary waiver of further, undisclosed, information turns on
whether “fairness and consistency so require” (S&K, above, at
paras 6, 10).
[60]
Accordingly, “[t]he
issue in a ‘fairness and consistency’ analysis is whether the partial
disclosure of privileged information can result in unfairness to the other
side” (Merck & Co Inc v Apotex Inc, 2009 FCA 27, at
para 13 [Merck]).
[61]
In this regard, “the
presence of an intent to mislead the court or another litigant is of primary
importance” (Stevens v Canada (Prime Minister), [1998] FCJ No 794
(QL), at para 51 (FCA) [Stevens]). However, the Court must also
consider whether, as an objective fact, the Court or another litigant is likely
to be misled by the partial disclosure. That is to say, it must be demonstrated
that, without the further information in respect of which privilege has not
been waived, the disclosed information is somehow misleading (Transamerica,
above; Commissioner of Competition v United Grain Growers Limited, 2002
Comp Trib 35, at para 82; KF Evans Ltd v Canada (Minister of
Foreign Affairs), [1996] FCJ No 30 (QL), at paras 22–24 (FCTD)).
[62]
Thus, there can be no unfairness to the party
asserting waiver if that party would be left in exactly the same position or,
in any event, no worse off in its litigation with the other party, relative to
the position in which that party would have been in if the partial disclosure
had not been made (Merck, above, at para 17).
[63]
In the absence of an intention to mislead the
Court or another party to the proceeding, or a finding that the Court or
another party is likely to be misled as a matter of fact, the disclosure, in
the interest of transparency, by a public authority of more information than is
legally required to be disclosed is commendable and in no way detracts from the
protection afforded by privilege (Stevens, above, at para 52).
C.
Analysis
[64]
The first of the four documents in respect of
which Additional Information was provided is document # 12 on the Amended Index
of Relevant Documents that the Commissioner disclosed to Kobo [the Amended
Index]. That document is an internal briefing memorandum from the Senior Deputy
Commissioner to the Commissioner. The Additional Information that was disclosed
in this document is the text of footnote 3, which states: “This recommendation is consistent with the Bureau’s approach
described where parties demonstrate a continuing commitment to a [sic]
resolving a matter. See Competition Bureau, ‘Communication during Inquiries’
June 26, 2014, at page 6.” Kobo maintains that fairness and consistency
require that it have the opportunity to know the nature of the recommendation
in question, and indeed to know the rest of the undisclosed information in the
document.
[65]
I disagree. Having reviewed an unredacted
version of document #12, I am satisfied that the disclosure of the text quoted
immediately above did not result in any unfairness to Kobo. Kobo is not now in
a position of having been misled by the Commissioner, either by virtue of not
having access to the remaining unredacted information in that document, or by
virtue of not knowing the nature of the recommendation referenced in the quote
above. Moreover, it is difficult to see how the Commissioner could benefit in
his litigation with Kobo in any way, based on the fact that this disclosure was
made. Considerations of fairness and consistency do not require the disclosure
of any additional information to Kobo, as a consequence of the Commissioner’s
disclosure of the Additional Information in document #12.
[66]
The second document in respect of which
Additional Information was provided is document # 15 on the Amended Index. The
Additional Information that was disclosed in this document was on the second,
fourth and fifth pages, and pertains to an issue that Kobo itself has raised in
its Application. That issue is that “if ‘an
arrangement’ within the meaning of s. 90.1 of the Act, did once exist, the
Commissioner acted without jurisdiction by entering into the [CAs] to remedy
‘an arrangement’ that was not ‘existing or proposed’ at the time he entered into
[the CAs], given the passage of time and the resolutions of the U.S. courts and
antitrust enforcers.”
[67]
The Additional Information that was disclosed on
the second and fourth pages of document #15 (including in a sentence that
extends onto the fifth page) simply reveals that this argument has been
advanced by one or more parties. In my view, neither the Court nor Kobo could
be misled by the disclosure of this information.
[68]
The only other Additional Information that is disclosed
in document #15 is a passage on the fifth page which notes that, despite
certain (unredacted) arguments that have been made to the Commissioner, the
case team “notes that the publishers that are the
subject of the investigation continue to operate with agency agreements that
prevent discounting in Canada and many of which contain MFN clauses. That is,
none of the publishers have adopted the substantive terms of the U.S.
Final Judgments in Canada ...”
[69]
Once again, I do not consider that the Court or
Kobo could be misled by the disclosure of this information, including the fact
that certain unknown arguments were made to the Commissioner by one or more
persons. The relevant alleged facts that were disclosed by the Commissioner in
this passage were that the publishers in question continue to operate with
agency agreements that prevent discounting in Canada, that some of those
agreements contain Price MFN Clauses, and that therefore those publishers have
not adopted the substantive terms of the U.S. Final Judgments in Canada. Having
reviewed the unredacted contents of the entire document, I am satisfied that
fairness and consistency do not require that additional disclosures of other information
contained in that document, or contained in other documents in respect of which
the Commissioner has claimed privilege be made.
[70]
The third document in respect of which
Additional Information was provided is document # 16 on the Amended Index. The
Additional Information that was disclosed in that document consists of the
following four categories of information: (i) the identities of the previously
unidentified sources of information that was voluntarily provided to the
Commissioner, namely, the Respondent Publishers and HarperCollins; (ii) certain
information that was provided by HarperCollins regarding the origins and launch
of the agency form of distribution in the United States and Canada, and
regarding a contemporaneous meeting that the five principal book publishers had
with one or more representatives of Apple Inc.; (iii) information obtained from
Apple Inc. and from Apple Canada Inc. in that regard, including in respect of
issues that remained to be resolved and options that were being considered in
Canada at that time; and (iv) an explanation of what may have caused Amazon to
delay implementing the agency approach to E-book distribution in Canada.
[71]
Having reviewed a fully unredacted version of
document # 16, it is not apparent to me how the disclosure of any of the
above-described Additional Information might mislead the Court or Kobo, or
cause any unfairness to Kobo. If anything, the Additional Information places
Kobo in a more informed position than it may have been in before it obtained
such information. In any event, it is difficult to see how Kobo could be any
worse off in its litigation with the Commissioner in the within Application than
it was before the disclosure of that information. There is nothing in the
remainder of the document that remains redacted and that should be disclosed to
Kobo to ensure fairness and consistency.
[72]
Finally, the fourth document in respect of which
Additional Information was provided is document # 17 on the Amended Index. The
Additional Information that was disclosed in this document consists of (i)
words that indicate that a certain chart that appears at page 10 of the
document is an internal Competition Bureau cost-breakdown chart that includes
expenditures that the case team expects to incur; (ii) headings in that chart
that make it readily apparent that the chart is in fact an internal
cost-breakdown chart; and (iii) a brief statement of the decision of the Competition
Bureau’s Major Enforcement and Advocacy Committee [MEAC] to attempt to
negotiate a new consent agreement with the relevant E-book publishers, together
with MEAC’s recommendation that the Commissioner provisionally approve the
filing of an application with the Tribunal pursuant to s. 90.1 of the Act. In
addition, the words “Failing successful negotiation of
[a revised consent] agreement,” were inserted before the words “MEAC recommends that the Commissioner approve” an
undisclosed course of action.
[73]
Once again, having reviewed a fully unredacted
version of document # 17, it is not apparent to me how the disclosure of any of
the above-described Additional Information might mislead the Court or Kobo, or
cause any unfairness to Kobo. None of that information appears to relate in any
meaningful way to the issues that Kobo has raised in its Application. I am
satisfied that that fairness and consistency do not require the disclosure of
any further information in the document, in respect of which the Commissioner
continues to assert privilege.
[74]
For completeness, I would simply add the
following. First, Kobo did not lead any evidence to establish that the
Commissioner intended to mislead the Court or Kobo, when it provided the
Additional Information to Kobo on an “outside counsel only” basis. Second, with
the exception of the Additional Information that is contained in document #16,
in respect of which the Commissioner has sought an order of confidentiality,
the Commissioner has taken the position that Kobo’s counsel is free to disclose
the Additional Information to Kobo. Finally, the Commissioner did not
cross-examine Kobo’s affiant on any of the Additional Information.
V.
Kobo’s Request for an Order Varying the Timetable
in the Within Application
[75]
Given the conclusions that I have reached in
Part IV above, it is unnecessary for me to address this request by Kobo, as it
was conditional on the Commissioner being ordered to produce additional
information in respect of which he continues to assert privilege.
VI.
Conclusion
[76]
For the reasons set forth in Part III
above, the hearing of the Application in the within proceeding will be stayed
until the Tribunal releases its decision on HarperCollins’ Motion for Summary
Dismissal.
[77]
For the reasons set forth in Part IV above,
Kobo’s request for an Order requiring the Commissioner to produce to Kobo
unredacted versions of all of the documents in respect of which he continues to
assert a claim of privilege will be denied.
[78]
Kobo’s request for leave to file amended or
supplementary material will therefore also be denied
[79]
Given that Kobo and the Commissioner have each
prevailed on one of the two principal issues on this Motion, no costs will be
awarded on this Motion.
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