A Case Review of Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61

In Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61, the Court of Appeal affirmed the decision of a motion judge granting a stay of proceedings arising from unauthorized access by a litigant to privileged documents.[1] These documents included legal opinions, strategy documents, and emails.[2]

The test to decide the appropriate remedy where privileged information is received by an opposing party or their lawyers was set out by the Supreme Court in Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, and MacDonald Estate v. Martin, 1990 CanLII 32 (SCC).[3] The analysis is focused on trial fairness and the integrity of the adjudicative process.[4] A breach of privilege “creates a serious risk to the integrity of the administration of justice” and to prevent this, the courts must act “swiftly and decisively”.[5]

There are three stage to the analysis.[6]

First, the moving party seeking relief must prove that the opposing/responding party obtained access to their privileged materials.[7]

Second, there is a rebuttable presumption of prejudice.[8] The responding party bears the onus of rebutting the presumed prejudice flowing from receipt of the privileged information.[9]

The presumption can be rebutted by identifying to the court, with some precision, that:

• the responding party did not review any of the privileged documents in their possession;
• the responding party reviewed some documents, but the documents reviewed were not privileged; or
• the privileged documents reviewed were nevertheless not likely to be capable of creating prejudice.[10]

The evidence adduced to rebut the presumption must be “clear and convincing” such that a reasonably informed person would be satisfied that no use of the confidential information would occur.[11] A fortiori undertakings and conclusory statements in affidavits without more will not suffice.[12]

There are compelling reasons for the presumption of prejudice and the reverse onus on the party in receipt of privileged information:

• Requiring the moving party whose privileged information has been disclosed or accessed to prove actual prejudice would require them to disclose further confidential or privileged materials;
• Placing the burden on the responding party who has access to the privileged information is consonant with the usual practice that “the party best equipped to discharge a burden is generally required to do so”; and
• The moving party should not have to bear the onus of clearing up the problem created by the responding party’s carelessness.[13]

Third, an appropriate remedy needs to be fashioned.[14] By this remedy stage, the responding party has failed to rebut the presumption of prejudice and the question is how to rectify the prejudice to ensure fairness.[15]

A party seeking a stay has the burden of showing “special circumstances” to justify a stay which is only granted where there is (i) prejudice to the right to a fair trial or the integrity of the justice system and (ii) no alternative remedy to cure the prejudice.^[16]

Less serious remedies must first be considered before a stay of proceedings which is an extraordinary remedy that should be reserved for the clearest of cases.[17] A stay is a remedy of last resort to be imposed only to prevent ongoing prejudice, unfairness to a party or harm to the administration of justice.[18]

A list of non-exhaustive factors to be considered in determining an appropriate remedy include:

• How the documents came into the possession of the responding party or their counsel;
• What the responding party and their counsel did upon recognition that the documents were potentially subject to solicitor-client privilege;
• The extent of review of the privileged material;
• Contents of the solicitor-client communications and the degree to which they are prejudicial;
• The stage of the litigation; and
• The potential effectiveness of a firewall or other precautionary steps to avoid mischief.[19]

Where the party in receipt of privileged documents fails to identify the documents reviewed, they put the court in an “invidious position” of being unable to determine the extent of the actual review and the degree of prejudice.[20] The Court can then presume that the third and fourth factors weigh against the responding party and an adverse presumption can be drawn.[21]

—

[1] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at paras 1-7.

[2] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at 2.

[3] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 31.

[4] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 31.

[5] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 31; citing Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36 at para 34.

[6] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 32.

[7] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 33.

[8] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 34.

[9] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 34.

[10] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 35.

[11] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 36.

[12] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 36.

[13] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 39.

[14] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 40.

[15] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 41.

[16] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 42.

[17] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 43.

[18] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 43.

[19] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 44.

[20] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 45.

[21] Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61 at para 45.