Woods obtains an important judgment of the Court of Appeal on Anton Piller Orders

Important Decision from the Quebec Court of Appeal on Anton Piller Orders

On July 31, 2013, the Quebec Court of Appeal rendered an important decision in favor of Defendants/Respondents represented by Woods. This decision, entitled IMS Health Canada Inc. v. Th!nk Business Insights Ltd., 2013 QCCA 1303 (available below), sought to answer the following question:

“In the case of a Motion to Quash an Anton Piller order obtained ex parte, is the party that obtained said order entitled to have access to the “fruits of the search” (the seized evidence) before the Court has had the opportunity to rule on said motion?”

(our translation)

In a decision written by the Honourable Clément Gascon on behalf of a unanimous bench, the Court of Appeal confirmed that access to the “fruits of the search” is not automatic and that the Superior Court can exercise its discretion in refusing or granting access to same, taking into account the following factors:

• The interests of Justice;
• The grounds raised in the Motion to Quash;
• The serious nature of said grounds; and
• The specific circumstances of the file.

In this file, the Court of Appeal found that the judge in first instance had correctly exercised his discretion in refusing to grant access to the seized evidence, based on the following elements:

• The serious grounds invoked by the Defendants/Respondents, which include:
  • The wide and vague text of the Anton Piller order;
  • The insufficient or inexistent evidence regarding the risk of destruction of evidence in Plaintiff/Appellant’s motion and in the evidence presented at the ex parte hearing; and
  • Plaintiff/Appellant’s failure to disclose all of the relevant information and evidence during said hearing;
• The short delay (two weeks) between the execution of the Anton Piller order and the filing of the Motion to Quash (element of diligence);
• The large number of documents that were seized and the high costs associated with reviewing same in order to raise specific objections to their communication (re: relevance or privilege); and
• The absence of prejudice to the Plaintiff/Appellant, since the seized evidence is to remain under seal with the independent solicitor until a final decision has been rendered on the Motion to Quash.

Indeed, the Anton Piller order in this case called for the seizure, via an independent solicitor, of a wide range of documents (both electronic and material) at the home of one of the personal Defendants/Respondents. It then allowed for the communication of the seized evidence to the Plaintiff/Respondent after a short period (initially 24 hours, but later extended by consent), subject to Defendants/Respondents’ right to raise specific objections within that period.

The Superior Court of Quebec and the Quebec Court of Appeal both recognized that this constituted, in the present matter, an undue burden for the Defendants/Respondents, since they would have had to conduct a full review of the seized documents before being allowed to contest the Anton Piller order, including any contestation of this specific provision.

The Court of Appeal also took note of Defendants/Respondents’ argument that this would constitute a reversal of the discovery rules applicable in Quebec, stating that this serious argument deserved a more thorough analysis at the hearing of the Motion to Quash.

In response to Plaintiff/Appellant’s argument that Canadian and Quebec case law had unanimously found that the fruits of the search must be considered at the hearing of a Motion to Quash, which must be conducted de novo, the Court of Appeal found that this case law could only be said to recognize a discretionary power allowing the Superior Court to accept or reject the fruits of the search as evidence.

The Court of Appeal also stated that the ratio of these decisions appears to be inapplicable to the current context of Anton Piller orders, since most of the decisions cited were rendered (1) in cases where the seized evidence was already in the hands of the plaintiffs and (2) before the Supreme Court of Canada’s decision in Celanese Canada Inc. v. Murray Demolition Corp., 2006 CSC 36, which confirmed the existence of certain minimal guarantees afforded to defendants subjected to Anton Piller orders, namely the right to contest an order rendered ex parte within a short period of time and the mandatory involvement of an independent solicitor that must take possession of the seized evidence.

The Court of Appeal reiterated that the main purpose of Anton Piller orders is to conserve evidence that would likely be destroyed in the normal course of litigation and that such orders are not to be used as an alternative means of conducting discovery, to conduct abusive searches or to attempt fishing expeditions.

The Plaintiff/Appellant has since announced its intention to file a Motion for Leave to Appeal this decision to the Supreme Court of Canada.

This decision was also commented at page 2 of the September 6, 2013 edition of The Lawyers Weekly, available below.