Saturley v. CIBC World Markets Inc.,

• Jurisdiction: Nova Scotia
• Judge: Moir, J.
• Neutral Citation: 2011 NSSC 4
• Citation: 2011 NSSC 4,(2011), 297 N.S.R.(2d) 371 (SC),[2011] NSJ No 8 (QL),297 NSR (2d) 371,297 NSR(2d) 371,[2011] NS.J. No 8 (QL),297 N.S.R.(2d) 371,(2011), 297 NSR(2d) 371 (SC)
• Date: 07 January 2011
• Court: Supreme Court of Nova Scotia (Canada)

Saturley v. CIBC World Markets Inc. (2011), 297 N.S.R.(2d) 371 (SC);

    943 A.P.R. 371

MLB headnote and full text

Temp. Cite: [2011] N.S.R.(2d) TBEd. JA.018

Fredrick Thomas Saturley (plaintiff) v. CIBC World Markets Inc. (defendant)

(Hfx. No. 305635; 2011 NSSC 4)

Indexed As: Saturley v. CIBC World Markets Inc.

Nova Scotia Supreme Court

Moir, J.

January 7, 2011.

Summary:

Saturley was an investment adviser at CIBC World Markets. An error, for which CIBC was responsible, was made in calculating margins on certain options accounts. The error cost Saturley's clients millions of dollars, and CIBC reversed numerous transactions at its cost. When the error was under investigation, CIBC uncovered information that it claimed showed Saturley engaged in unauthorized discretionary trading. CIBC terminated Saturley's employment. Saturley sued for wrongful dismissal and intentional interference with economic relations. In connection with his claim, Saturley alleged that CIBC's handling of complaints about the calculation error, the conduct of the investigation, related communications, and the dismissal harmed his professional reputation. Saturley sought production of all paper documents and electronic information concerning the error between CIBC and the firm (ADP) that made the margin calculations. CIBC refused on the ground that the communications were irrelevant. CIBC sought production of all paper documents and electronic information recording communications by Saturley with the affected clients after his dismissal. Saturley refused on the ground that the communications were irrelevant.

The Nova Scotia Supreme Court considered rule 14.01(1) of the Civil Procedure Rules, which defined "relevant" and "relevancy" for Part 5 of the Rules. The court ordered production of communications between CIBC World Markets and ADP only to the extent that there might be undisclosed communications pinpointing when CIBC received confirmation that ADP made the calculation error and what was said in that connection, or discussing Saturley or his conduct. The court ordered production of communications between Saturley and the former clients only within the parameters described.

Practice - Topic 4151

Discovery - General principles - Nature and scope of discovery - [See first Practice - Topic 4573 ].

Practice - Topic 4153

Discovery - General principles - Interpretation of discovery rules - [See first Practice - Topic 4573 ].

Practice - Topic 4573

Discovery - What documents must be produced - Documents related to or relevant and material to matters in issue - The Nova Scotia Supreme Court considered rule 14.01(1) of the Civil Procedure Rules, which defined "relevant" and "relevancy" for Part 5 of the Rules - The court stated that an examination of the legislative history, the recent jurisprudence, and the text of rule 14.01 led to the following conclusions: "The semblance of relevancy test for disclosure and discovery has been abolished; The underlying reasoning, that it is too difficult to assess relevancy before trial, has been replaced by a requirement that judges do just that. Chambers judges are required to assess relevancy from the vantage of a trial, as best as it can be constructed; The determination of relevancy for disclosure of relevant documents, discovery of relevant evidence, or discovery of information likely to lead to relevant evidence must be made according to the meaning of relevance in evidence law generally. The Rule does not permit a watered-down version; Just as at trial, the determination is made on the pleadings and evidence known to the judge when the ruling is made. In my opinion, these conclusions follow from, and are enlightened by, the principle that disclosure of relevant, rather than irrelevant, information is fundamental to justice and the recognition that an overly broad requirement worked injustices in the past. In my opinion, these conclusions do not suggest a retreat from the broad or liberal approach to disclosure and discovery of relevant information that has prevailed in this province since 1972" - See paragraphs 46 to 47.

Practice - Topic 4573

Discovery - What documents must be produced - Documents related to or relevant and material to matters in issue - Saturley was an investment adviser at CIBC World Markets - An error, for which CIBC was responsible, was made in calculating margins on certain options accounts - The error cost Saturley's clients millions of dollars, and CIBC reversed numerous transactions at its cost - When the error was under investigation, CIBC uncovered information that it claimed showed Saturley engaged in unauthorized discretionary trading - CIBC terminated Saturley's employment - Saturley sued for wrongful dismissal and intentional interference with economic relations - In connection with his claim, Saturley alleged that CIBC's handling of complaints about the calculation error, the conduct of the investigation, related communications, and the dismissal harmed his professional reputation - Saturley sought production of all paper documents and electronic information concerning the error between CIBC and the firm (ADP) that made the margin calculations - CIBC refused on the ground that the communications were irrelevant - The Nova Scotia Supreme Court considered rule 14.01(1) of the Civil Procedure Rules, which defined "relevant" and "relevancy" for Part 5 of the Rules - The court ordered production of communications between CIBC World Markets and ADP only to the extent that there might be undisclosed communications pinpointing when CIBC received confirmation that ADP made the calculation error and what was said in that connection, or discussing Saturley or his conduct - See paragraphs 48 to 70.

Practice - Topic 4573

Discovery - What documents must be produced - Documents related to or relevant and material to matters in issue - Saturley was an investment adviser at CIBC World Markets - An error, for which CIBC was responsible, was made in calculating margins on certain options accounts - The error cost Saturley's clients millions of dollars, and CIBC reversed numerous transactions at its cost - When the error was under investigation, CIBC uncovered information that it claimed showed Saturley engaged in unauthorized discretionary trading - CIBC terminated Saturley's employment - Saturley sued for wrongful dismissal and intentional interference with economic relations - In connection with his claim, Saturley alleged that CIBC's handling of complaints about the calculation error, the conduct of the investigation, related communications, and the dismissal harmed his professional reputation - CIBC sought production of all paper documents and electronic information recording communications by Saturley with the affected clients after his dismissal - Saturley refused on the ground that the communications were irrelevant - The Nova Scotia Supreme Court considered rule 14.01(1) of the Civil Procedure Rules, which defined "relevant" and "relevancy" for Part 5 of the Rules - The court stated that proof of Saturley's efforts to defend his reputation and of the responses of former clients was relevant to establishing the extent of any damage and of mitigation - That would include any explanations given by Saturley to former clients about the calculation error, the alleged discretionary trading, and the reasons for his departure, his efforts to retain the business of former clients, the clients' responses to the explanations and efforts, approaches from those clients who wanted to remain loyal and who took the active role in re-establishing a business relationship, and evidence about those clients who chose not to be loyal, or who discharged Saturley after having chosen to re-establish a business relationship - The court was prepared to order production of records of communications that fell within those parameters - Beyond those parameters, the communications between Saturley and former clients would not serve to establish or disprove any fact in issue - See paragraphs 71 to 84.

Words and Phrases

Relevancy - The Nova Scotia Supreme Court considered the meaning of "relevancy" as defined in rule 14.01(1) of the Nova Scotia Civil Procedure Rules - See paragraphs 8 to 47.

Words and Phrases

Relevant - The Nova Scotia Supreme Court considered the meaning of "relevant" as defined in rule 14.01(1) of the Nova Scotia Civil Procedure Rules - See paragraphs 8 to 47.

Cases Noticed:

Halifax-Dartmouth Bridge Commission v. Walter Construction Corp. et al. (2009), 286 N.S.R.(2d) 179; 909 A.P.R. 179; 2009 NSSC 403, consd. [para. 8].

Humphrey v. Portage La Prairie Mutual Insurance Co. (2009), 277 N.S.R.(2d) 39; 882 A.P.R. 39; 2009 NSSC 153, refd to. [para. 8].

Compagnie Financière et Commerciale du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B. 55 (C.A.), refd to. [para. 16].

Eastern Canadian Coal Gas Venture Ltd. v. Cape Breton Development Corp. (1994), 137 N.S.R.(2d) 123; 391 A.P.R. 123 (S.C.), affd. (1995), 141 N.S.R.(2d) 180; 403 A.P.R. 180 (C.A.), refd to. [para. 17].

Roadside Fisheries Ltd. v. Canadian General Surety Co. et al. (1996), 156 N.S.R.(2d) 315; 461 A.P.R. 315 (S.C.), refd to. [para. 17].

McCrea v. Canada Newspapers Co. et al. (1993), 122 N.S.R.(2d) 411; 338 A.P.R. 411 (S.C.), refd to. [para. 17].

Upham v. You (1986), 73 N.S.R.(2d) 73; 176 A.P.R. 73 (C.A.), refd to. [para. 17].

Murphy v. Lawton's Drug Stores Ltd. (2010), 295 N.S.R.(2d) 1; 935 A.P.R. 1; 2010 NSSC 289, consd. [para. 32].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 14.01(1) [para. 25].

Authors and Works Noticed:

Nova Scotia, Final Report of the Discovery and Disclosure Working Group (Steering Committee) (May 24, 2005), pp. 4, 5 [para. 22]; 7 [para. 23].

Woolf, Access to Justice: Interim Report to the Lord Chancellor on the Civil Justice System in England and Wales (1995), p. 167 [para. 19].

Counsel:

George MacDonald, Q.C., and Jack Graham, Q.C., for plaintiff;

Michael S. Ryan, Q.C., and John A. Keith, for defendant.

This matter was decided without a hearing by Moir, J., of the Nova Scotia Supreme Court, who delivered the following decision on January 7, 2011.