Celanese Canada Inc. v. Murray Demolition Corp. et al., (2006) 215 O.A.C. 266 (SCC)

• Judge: McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ.
• Court: Supreme Court of Canada
• Case Date: Monday December 12, 2005
• Jurisdiction: Canada (Federal)
• Citations: (2006), 215 O.A.C. 266 (SCC);2006 SCC 36

Celanese Can. v. Murray Demolition (2006), 215 O.A.C. 266 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2006] O.A.C. TBEd. JL.062

Canadian Bearings Ltd., Farrokh Khalili, Hossein Banijamali and Canadian Petroleum Processing & Equipment Inc. (appellants) v. Celanese Canada Inc. and Celanese Ltd. (respondents) and Advocates' Society and Canadian Bar Association (intervenors)

(30652; 2006 SCC 36; 2006 CSC 36)

Indexed As: Celanese Canada Inc. v. Murray Demolition Corp. et al.

Supreme Court of Canada

McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ.

July 27, 2006.

Summary:

The applicant defendants sought to have a law firm removed as the plaintiffs' solicitors of record on the basis that they had seen privileged material seized from one defendant's premises pursuant to an Anton Piller Order.

The Ontario Superior Court, in a decision reported at [2003] O.T.C. 944, dismissed the motion. The applicants appealed.

The Ontario Divisional Court, in a decision reported at 183 O.A.C. 296, allowed the appeal. The plaintiffs appealed.

The Ontario Court of Appeal, in a decision reported at 190 O.A.C. 329, allowed the appeal and remitted the matter to the motion judge. The defendants appealed.

The Supreme Court of Canada allowed the appeal.

Barristers and Solicitors - Topic 781

Duty to court - Disqualification of counsel - General - The Supreme Court of Canada held that "lawyers who undertake a search under the authority of an Anton Piller order and thereby take possession of relevant confidential information attributable to a solicitor-client relationship, bear the onus of showing there is no real risk such confidences will be used to the prejudice of the defendant. Difficulties of proof compounded by errors in the conduct of the search and its aftermath should fall on the heads of those responsible for the search, not of the party being searched." - See paragraph 55.

Barristers and Solicitors - Topic 785

Duty to court - Disqualification of counsel - Standard for removal - A law firm, in  acting for a client, inadvertently came into possession of documents belonging to the opposing side that were protected by solicitor and client privilege - The Supreme Court of Canada stated that "if a remedy short of removing the searching solicitors will cure the problem, it should be considered. ... the task 'is to determine whether the integrity of the justice system, viewed objectively, requires removal of counsel in order to address the violation of privilege, or whether a less drastic remedy would be effective'. The right of the plaintiff to continue to be represented by counsel of its choice is an important element of our adversarial system of litigation. In modern commercial litigation, mountains of paper are sometimes exchanged. Mistakes will be made. There is no such thing, in these circumstances, as automatic disqualification." - See paragraph 56.

Barristers and Solicitors - Topic 785

Duty to court - Disqualification of counsel - Standard for removal - A law firm, in acting for a client, inadvertently came into possession of documents belonging to the opposing side that were protected by solicitor and client privilege - The Advocates' Society and the Canadian Bar Association (interveners) suggested factors to be considered in determining whether solicitors should be removed: (i) how the documents came into the possession of the plaintiff or its counsel; (ii) what the plaintiff and its counsel did upon recognition that the documents were potentially subject to solicitor- client privilege; (iii) the extent of review made of the privileged material; (iv) the contents of the solicitor-client communications and the degree to which they are prejudicial; (v) the stage of the litigation; and (vi) the potential effectiveness of a firewall or other precautionary steps to avoid mischief - The Supreme Court of Canada stated that while other factors might present themselves in different cases, the foregoing list of factors was appropriate and sufficient to dispose of the present appeal -See paragraph 59.

Barristers and Solicitors - Topic 787

Duty to court - Disqualification of counsel - When available - Grounds - [See both Barristers and Solicitors - Topic 785].

Practice - Topic 3378.9

Interim proceedings - Preservation of property - Anton Piller Order - General - The Supreme Court of Canada set out guidelines for the preparation and execution of an Anton Piller order that might be helpful, depending on the circumstances - See paragraph 40.

Practice - Topic 3379.1

Interim proceedings - Preservation of property - Anton Piller Order - Conditions precedent - The Supreme Court of Canada stated that "There are four essential conditions for the making of an Anton Piller order. First, the plaintiff must demonstrate a strong prima facie case. Second, the damage to the plaintiff of the defendant's alleged misconduct, potential or actual, must be very serious. Third, there must be convincing evidence that the defendant has in its possession incriminating documents or things, and fourthly it must be shown that there is a real possibility that the defendant may destroy such material before the discovery process can do its work" - See paragraph 35.

Practice - Topic 3381

Interim proceedings - Preservation of property - Property under preservation order - Use of - The Supreme Court of Canada held that safeguards could not remain implicit in an Anton Piller supervision order, but had to be specified - See paragraph 39.

Cases Noticed:

MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd., [1990] 3 S.C.R. 1235; 121 N.R. 1; 70 Man.R.(2d) 241; 77 D.L.R.(4th) 249; [1991] 1 W.W.R. 705, appld. [para. 3].

Gray, Administrator of MacDonald Estate - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Martin v. Gray - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Grenzservice Speditions GmbH v. Jans (1995), 15 B.C.L.R.(3d) 370 (S.C.), refd to. [para. 29].

Ridgewood Electric Ltd. (1990) v. Robbie et al., [2005] O.T.C. 129; 74 O.R.(3d) 514 (Sup. Ct.), refd to. [para. 29].

Netbored Inc. v. Avery Holdings Inc. et al., [2005] F.T.R. Uned. B02; 2005 FC 1405, refd to. [para. 29].

Neumeyer v. Neumeyer, [2005] B.C.T.C. 1259; 47 B.C.L.R.(4th) 162; 2005 BCSC 1259, refd to. [para. 29].

Anton Pillar KG v. Manufacturing Processes Ltd. et al., [1976] 1 All E.R. 779; [1976] Ch. 55 (C.A.), refd to. [para. 30].

Nintendo of America Inc. v. Coinex Video Games Inc. et al., [1983] 2 F.C. 189; 46 N.R. 311 (F.C.A.), refd to. [para. 35].

Indian Manufacturing Ltd. et al. v. Lo et al. (1997), 215 N.R. 76; 75 C.P.R.(3d) 338 (F.C.A.), refd to. [para. 35].

Netsmart Inc. v. Poelzer et al., [2003] 1 W.W.R. 698; 324 A.R. 260; 2002 ABQB 800, refd to. [para. 35].

Pulse Microsystems Ltd. et al. v. Safesoft Systems Inc. et al. (1996), 110 Man.R.(2d) 163; 118 W.A.C. 163; 67 C.P.R.(3d) 202; 47 C.P.C.(3d) 360 (C.A.), refd to. [para. 35].

Ontario Realty Corp. v. Gabriele (P.) & Sons Ltd. et al., [2000] O.T.C. 796; 50 O.R.(3d) 539; 50 C.P.C.(4th) 278 (Sup. Ct.), refd to. [para. 35].

Procter & Gamble Inc. et al. v. John Doe et al., [2000] F.T.R. Uned. 26 (T.D.), refd to. [para. 35].

Adobe Systems Inc. et al. v. KLJ Computer Solutions Inc. et al., [1999] 3 F.C. 621; 166 F.T.R. 184 (T.D.), refd to. [para. 35].

Lavallee, Rackel & Heintz et al. v. Canada (Attorney General), [2002] 3 S.C.R. 209; 292 N.R. 296; 312 A.R. 201; 281 W.A.C. 201; 164 O.A.C. 280; 217 Nfld. & P.E.I.R. 183; 651 A.P.R. 183; 216 D.L.R.(4th) 257; 167 C.C.C.(3d) 1; 2002 SCC 61, refd to. [para. 39].

Thermax Ltd. v. Schott Industrial Glass Ltd., [1981] F.S.R. 289 (Ch. D.), refd to. [para. 39].

Descôteaux et al. v. Mierzwinski et al., [1982] 1 S.C.R. 860; 44 N.R. 462; 141 D.L.R.(3d) 590; 70 C.C.C.(2d) 385, refd to. [para. 40].

Havana House Cigar & Tobacco Merchants Ltd. et al. v. Jane Doe et al. (2000), 199 F.T.R. 12 (T.D.), affd. (2002), 288 N.R. 198; 2002 FCA 75, refd to. [para. 40].

Columbia Pictures Inc. v. Robinson, [1987] Ch. 38, refd to. [para. 40].

Universal Thermosensors Ltd. v. Hibben, [1992] 1 W.L.R. 840 (Ch. D.), refd to. [para. 40].

Sulpher Experts Inc. v. O'Connell et al. (2000), 279 A.R. 246; 2000 ABQB 875, refd to. [para. 41].

Tilley v. Hails (1993), 12 O.R.(3d) 306; 18 C.P.C.(3d) 381 (Gen. Div.), dist. [para. 57].

Aviaco International Leasing Inc. et al. v. Boeing Canada Inc. et al., [2000] O.T.C. 982; 9 B.L.R.(3d) 99 (Sup. Ct.), dist. [para. 57].

Coulombe v. Beard (1993), 16 O.R.(3d) 627 (Gen. Div.), dist. [para. 57].

Nova Growth Corp. et al. v. Kepinski et al., [2001] O.T.C. 1037 (Sup. Ct.), leave to appeal refused [2002] O.J. No. 2522 (Div. Ct.), leave to appeal refused [2003] 1 S.C.R. xiv; 326 N.R. 398; 193 O.A.C. 399, dist. [para. 57].

Michel v. Lafrentz et al. (1992), 12 C.P.C.(3d) 119, additional reasons to (1992), 120 A.R. 355; 8 W.A.C. 355 (C.A.), dist. [para. 64].

Authors and Works Noticed:

Sharpe, Robert J., Injunctions and Specific Performance (1998) (2005 Looseleaf Update) (Release 13), para. 2:1300 [para. 30].

Counsel:

Robert B. Bell, Douglas M. Worndl and Benjamin T. Glustein, for the appellants;

Gavin MacKenzie and Michelle Vaillancourt, for the respondent, Celanese Canada Inc.;

Alan J. Lenczner, for the respondent, Celanese Ltd;

C. Clifford Lax, Q.C., and M. Paul Michell, for the intervener, Advocates' Society;

Mahmud Jamal and Derek Leschinsky, for the intervener, Canadian Bar Association.

Solicitors of Record:

Borden Ladner Gervais, Toronto, Ontario, for the appellants;

Heenan Blaikie, Toronto, Ontario, for the respondent, Celanese Canada Inc.;

Lenczner Slaght Royce Smith Griffin, Toronto, Ontario, for the respondent, Celanese Ltd.;

Lax O'Sullivan Scott, Toronto, Ontario, for the intervener, Advocates' Society;

Osler, Hoskin & Harcourt, Toronto, Ontario, for the intervener, Canadian Bar Association.

This appeal was heard on December 12, 2005, by McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ., of the Supreme Court of Canada. Binnie, J., delivered the following reasons for judgment for the court in both official languages on July 27, 2006.