1654776 Ontario Ltd. v. Stewart et al., 2013 ONCA 184

• Judge: Laskin, Juriansz and Tulloch, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 17, 2012
• Jurisdiction: Ontario
• Citations: 2013 ONCA 184;(2013), 304 O.A.C. 293 (CA)

1654776 Ont. v. Stewart (2013), 304 O.A.C. 293 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MR.033

1654776 Ontario Limited (applicant/appellant) v. Sinclair Stewart and The Globe and Mail Inc. (respondents/respondents)

(C55493; 2013 ONCA 184)

Indexed As: 1654776 Ontario Ltd. v. Stewart et al.

Ontario Court of Appeal

Laskin, Juriansz and Tulloch, JJ.A.

March 27, 2013.

Summary:

The appellant applied for a "Norwich order" that the respondents disclose the identities of confidential sources for a story written by the respondent, Stewart, and published by the respondent, Globe and Mail Inc. The appellant believed that the confidential sources had breached the Ontario Securities Act. The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action. The respondents claimed journalist-source privilege.

The Ontario Superior Court (application judge), in a decision reported at [2012] O.T.C. Uned. 1991, dismissed the Norwich application. The appellant appealed.

The Ontario Court of Appeal dismissed the appeal. The respondents had satisfied the Wigmore test for establishing journalist-source privilege, and hence, the appellant had failed to satisfy the Norwich test.

Equity - Topic 1142

Equitable relief - Practice - Bill of discovery (incl. "Norwich order") - The appellant applied for a "Norwich order" that the respondents disclose the identities of confidential sources for a story written by the respondent, Stewart, and published by the respondent, Globe and Mail Inc. - The appellant believed that the confidential sources had breached the Ontario Securities Act - The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action - The respondents claimed journalist-source privilege - The case required the application of the Norwich test for determining when an applicant was entitled to learn the identity of a wrongdoer and the Wigmore test for determining whether a journalist could assert privilege to protect the identity of a confidential source - The application judge said that at the first step of the Norwich test the appellant was required to show a stronger case than an applicant in an ordinary Norwich application because freedom of expression was involved - On appeal, the Ontario Court of Appeal stated that "Generally, values like freedom of expression are to be considered at step five of the Norwich test. In this case the Wigmore test is the proper framework for considering the 'chilling effect on freedom of expression' and attempting to strike the 'appropriate balance' of the competing interests involved. Adopting a 'more robust standard' at step one of the Norwich test overlooks the function of step five, which is to consider whether the interests of justice favour disclosure. At step five of the Norwich analysis the Wigmore test can be applied to determine whether the interests of justice favour disclosure" - See paragraph 49.

Equity - Topic 1142

Equitable relief - Practice - Bill of discovery (incl. "Norwich order") - The appellant applied for a "Norwich order" that the respondents disclose the identities of confidential sources for a story written by the respondent, Stewart, and published by the respondent, Globe and Mail Inc. - The appellant believed that the confidential sources had breached the Ontario Securities Act - The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action - The respondents claimed journalist-source privilege - With respect to the first step in the Norwich test, the Ontario Court of Appeal stated that "[t]here is no requirement that the applicant show a prima facie case. The nature and apparent strength of the applicant's potential action should be weighed together with the other relevant factors. ... I would not apply a narrow approach at this stage of the analysis. The appellant is not engaged in 'mere fishing'. It is not seeking evidence but only the names of the alleged wrongdoers. Its proposed action is not frivolous. I would conclude that sufficient bona fides has been shown to justify consideration of the case as a whole. The apparent strength of the appellant's case can be revisited in the final weighing of all the relevant factors together" - See paragraphs 59 to 75.

Equity - Topic 1142

Equitable relief - Practice - Bill of discovery (incl. "Norwich order") - The appellant applied for a "Norwich order" that the respondents disclose the identities of confidential sources for a story written by the respondent, Stewart, and published by the respondent, Globe and Mail Inc. - The appellant believed that the confidential sources had breached the Ontario Securities Act - The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action - The respondents claimed journalist-source privilege - The case required the application of the Norwich test for determining when an applicant was entitled to learn the identity of a wrongdoer and the Wigmore test for determining whether a journalist could assert privilege to protect the identity of a confidential source - The Ontario Court of Appeal stated that "Applying the Wigmore test within the Norwich test requires close attention to the placement of the onus. ... In my view the onus is on the appellant to establish all aspects of the interests of justice other than the respondents' claim of privilege. The respondents have the onus of establishing their claim of privilege" - See paragraphs 79 to 81.

Equity - Topic 1142

Equitable relief - Practice - Bill of discovery (incl. "Norwich order") - The appellant filed a statement of claim against BCE Inc., 6796508 Canada Inc. (Canada Inc.) and John or Jane Doe - The appellant sought damages arising from fluctuations in the price of BCE shares over a four-day period during an attempted leveraged buy-out of BCE in 2007-2008 - On June 30, 2008 the respondent, Globe and Mail, had published a story regarding the buyout, which was written by the respondent, Stewart - The story reported information supplied by confidential sources - The appellant believed that the confidential sources had breached the Ontario Securities Act - Prior to issuing its statement of claim, the appellant had applied for a "Norwich order" that the respondents disclose the identities of the confidential sources for the story - The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action - The respondents claimed journalist-source privilege - The case required the application of the Norwich test for determining when an applicant was entitled to learn the identity of a wrongdoer and the Wigmore test for determining whether a journalist could assert privilege to protect the identity of a confidential source - The Ontario Court of Appeal affirmed a dismissal of the Norwich application - The court stated that "the greater public interest is served by upholding the respondents' claim of privilege. The public interest in free expression must always be weighed heavily in the balance. The balance may well have been shifted, had the apparent strength of the appellant's case been compelling; however the appellant has not put forward such a case. Whatever the merits of its case, the appellant can seek a remedy from BCE and Canada Inc. The public interest in promoting compliance with the disclosure regime regulated by the Securities Act can be adequately served by the appellant proceeding with its action against BCE" - The respondents had satisfied the Wigmore test, and hence, the appellant had failed to satisfy the Norwich test - See paragraphs 82 to 146.

Evidence - Topic 4191

Witnesses - Privilege - Communications to news media - General - [See first, third and fourth Equity - Topic 1142 ].

Evidence - Topic 4191

Witnesses - Privilege - Communications to news media - General - The appellant applied for a "Norwich order" that the respondents disclose the identities of confidential sources for a story written by the respondent, Stewart, and published by the respondent, Globe and Mail Inc. - The appellant believed that the confidential sources had breached the Ontario Securities Act - The appellant sought their identities to proceed with a proposed class action relying on the provisions of the Securities Act that created private rights of action - The respondents claimed journalist-source privilege - The case required the application of the Norwich test for determining when an applicant was entitled to learn the identity of a wrongdoer and the Wigmore test for determining whether a journalist could assert privilege to protect the identity of a confidential source - The third factor in the Wigmore test was that the relationship be one which should be sedulously fostered in the public interest - The application judge reasoned that as long as the journalist was an accredited professional with a legitimate news organization, the third step was readily satisfied - He rejected the appellant's argument that the relationship should be characterized more particularly as that between corporate insiders who breached the securities law disclosure regime and a business reporter who did not comply with his own newspaper's stated policy regarding the granting of confidentiality to sources - In rejecting that argument, the application judge reasoned that the third and fourth steps of the Wigmore test must be kept analytically distinct - The Ontario Court of Appeal shared the application judge's concern - The content of the communication was best analyzed at step four of the Wigmore test - Second, to avoid redundancy, the "public interest" that was considered at step three had to be different in nature from the "public interest" considered at step four - The redundancy could be avoided by considering, at step three, only the "public interest" in fostering the general relationship involved - The court stated that "In this case I would characterize the relationship generally and conclude that the relationship between a journalist and a source is one that should be sedulously fostered in the public interest" - See paragraphs 84 to 96.

Securities Regulation - Topic 5

Civil action for breach of statute - [See fourth Equity - Topic 1142 ].

Cases Noticed:

Norwich Pharmacal Co. et al. v. Customs and Excise Commissioners, [1974] A.C. 133 (H.L.), refd to. [para. 2].

GEA Group AG v. Ventra Group Co. et al. (2009), 254 O.A.C. 198; 96 O.R.(3d) 481; 2009 ONCA 619, refd to. [para. 2].

R. v. National Post et al., [2010] 1 S.C.R. 477; 401 N.R. 104; 262 O.A.C. 1; 2010 SCC 16, consd. [para. 3].

Globe and Mail v. Canada (Attorney General) ("Groupe Polygone") - see CTVglobemedia Publishing Inc. v. Canada (Attorney General) et al.

CTVglobemedia Publishing Inc. v. Canada (Attorney General) et al., [2010] 2 S.C.R. 592; 407 N.R. 202; 2010 SCC 41, refd to. [para. 30].

Warman v. Wilkins-Fournier et al. (2010), 261 O.A.C. 245; 100 O.R.(3d) 648; 2010 ONSC 2126 (Div. Ct.), not folld. [para. 47].

Morris v. Johnson et al., [2011] O.T.C. Uned. 3996; 107 O.R.(3d) 311; 2011 ONSC 3996, not folld. [para. 47].

Glaxo Wellcome plc v. Minister of National Revenue, [1998] 4 F.C. 439; 228 N.R. 164 (F.C.A.), consd. [para. 50].

Alberta (Treasury Branches) v. Leahy et al. (2000), 270 A.R. 1; 2000 ABQB 575, consd. [para. 50].

Straka v. Humber River Regional Hospital et al. (2000), 137 O.A.C. 316; 51 O.R.(3d) 1 (C.A.), consd. [para. 53].

P. v. T., [1997] 4 All E.R. 200; [1997] 1 C.R. 887 (Ch. D.), refd to. [para. 55].

Isofoton S.A. v. Toronto-Dominion Bank, [2007] O.T.C. Uned. 730; 85 O.R.(3d) 780 (Sup. Ct.), refd to. [para. 57].

Sharma v. Timminco Ltd. et al. (2012), 289 O.A.C. 19; 109 O.R.(3d) 569; 2012 ONCA 107, refd to. [para. 73].

Ainslie et al. v. CV Technologies Inc. et al., [2008] O.T.C. Uned. P37; 93 O.R.(3d) 200 (Sup. Ct.), refd to. [para. 114, footnote 5].

Silver et al. v. IMAX Corp. et al., [2009] O.T.C. Uned. V72; 66 B.L.R.(4th) 222 (Sup. Ct.), refd to. [para. 114, footnote 5].

Frank v. Farlie, Turner & Co. et al., [2012] O.T.C. Uned. 5519; 2012 ONSC 5519, refd to. [para. 114, footnote 5].

Abdula v. Canadian Solar Inc. et al. (2012), 289 O.A.C. 226; 2012 ONCA 211, refd to. [para. 114, footnote 5].

A.M. v. Ryan, [1997] 1 S.C.R. 157; 207 N.R. 81; 82 B.C.A.C. 81; 138 W.A.C. 81, refd to. [para. 135].

Statutes Noticed:

Securities Act, R.S.O. 1990, c. S-5, sect. 76, sect. 126.1, sect. 126.2 [para. 18]; sect. 138.3(2), sect. 138.3(3), sect. 138.3(4) [para. 21].

Authors and Works Noticed:

Allen Committee Report - see Toronto Stock Exchange Committee on Corporate Disclosure, Final Report, Responsible Corporate Disclosure - A Search for Balance.

Canadian Securities Administrators, CSA Notice 53-302 - Proposal for a Statutory Civil Remedy for Investors in the Secondary Market and Response to the Proposed Change to the Definitions of "Material Fact" and "Material Change" (2000), 23 O.S.C.B. 7383, generally [para. 112]; p. 7388 [para. 113].

Five Year Review Committee Final Report - Reviewing the Securities Act (Ontario) (2003), p. 131 [para. 115].

Gillen, Mark R., Securities Regulation in Canada (3rd Ed. 2007), p. 181 [para. 108].

Kimber Report - see Ontario, Report of the Attorney General's Committee of Securities Legislation in Ontario.

Leslie, Melanie B., The Costs of Confidentiality and the Purpose of Privilege (2000), Wis. L. Rev. 31, p. 31 [para. 102, footnote 4].

Ontario, Report of the Attorney General's Committee of Securities Legislation in Ontario (1965), generally [para. 104].

Toronto Stock Exchange Committee on Corporate Disclosure, Final Report, Responsible Corporate Disclosure - A Search for Balance (March 1997), pp. vi [para. 109]; vii [para. 110]; 40 [para. 111].

Counsel:

Paul Bates, A. Dimitri Lascaris, Douglas M. Worndl and Robert L. Gain, for the appellant;

Peter M. Jacobsen, Paul LeVay, Tae Mee Park, and Justin Safayeni, for the respondents.

This appeal was heard on September 17, 2012, before Laskin, Juriansz and Tulloch, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Juriansz, J.A., on March 27, 2013.