Judgments

[2000] 2 F.C. 400

T-85-97

Sierra Club of Canada, a national organization concerned with environmental protection and restoration and a non-profit corporation duly constituted on April 7, 1992 by Letters Patent under the Canadian Corporation Act (Applicant)

v.

The Minister of Finance of Canada, The Minister of Foreign Affairs of Canada, The Minister of International Trade of Canada and The Attorney General of Canada (Respondents)

and

Atomic Energy of Canada Limited (AECL) (Intervener)

Indexed as: Sierra Club of Canada v. Canada (Minister of Finance) (T.D.)

Trial Division, Pelletier J.—Ottawa, September 10 and October 26, 1999.

Practice — Affidavits — In camera application for leave pursuant to Federal Court Rules, 1998, r. 312 to file additional affidavit, containing as exhibits confidential documents prepared for purpose of Chinese regulatory process — Arising in course of application for judicial review of Canadian Government’s decision to provide financial assistance with respect to sale of nuclear reactors by AECL to People’s Republic of China — AECL submitting documents required to defend against possibility Sierra Club will seek environmental assessment pursuant to Canadian Environmental Assessment Act, ss. 8, 54 — Main concerns in application of r. 312 whether additional material would serve interests of justice, assist Court, not seriously prejudice other side — If documents permit Court to have before it evidence material to issues, interests of justice served, unless prejudice to another party shown — Confidential documents relevant to issue of appropriate remedy — Any prejudice caused to Sierra Club arising from delay caused by introduction of documents — Delay explained; not due to AECL’s indolence — Delay balanced by desirability of having entire record before Court — Leave granted.

Practice — Confidentiality orders — Application for confidentiality order in respect of application for leave to file additional affidavit containing confidential documents; affidavit, confidential documents themselves — Arising in course of application for judicial review of Canadian Government’s decision to provide financial assistance with respect to sale of nuclear reactors by AECL to People’s Republic of China — Under Federal Court Rules, 1998, r. 151 Court may order material filed treated as confidential provided satisfied need for confidentiality greater than public interest in open, accessible Court proceedings — Confidential documents property of Chinese authorities — Authorizing disclosure only if confidentiality order issuing — Issues in public domain, not simply matter of individual rights — Documents containing information disclosure of which could be harmful to AECL — Subjective element of test for granting confidentiality order met: AECL believing disclosure of documents harmful to competitive position — Objective part of test met as information consistently treated as confidential by AECL, Chinese authorities; on balance of probabilities disclosure could harm AECL’s commercial interests — In public law cases, third component whether public interest in disclosure exceeding risk of harm to party — Where disclosure voluntary, as here, document may be put into evidence in different form or other documents may be available to prove same facts — No evidence as to how relevant evidence could be put before Court in other ways not requiring confidentiality order, but possibility of expunging sensitive information — Need for confidentiality order not exceeding public interest in open justice — Burden of justifying confidentiality order onerous where issue of significant public interest — Nothing suggesting information contained in documents of interest to Court — AECL not prevented from mounting full defence by absence of confidentiality order, except to extent chooses not to put evidence in some form before Court — Public will benefit from open access — Judge not examining documents as voluminous, dealing with technical aspects of nuclear installation and could not be assessed in context.

Judges and Courts — Open justice — Confidentiality order sought regarding affidavits containing confidential documents upon application for judicial review of Government’s decision to provide financial assistance for sale of nuclear reactors to People’s Republic of China by AECL — Confidential documents property of Chinese authorities — Whether public interest in disclosure exceeding risk of harm to party from disclosure consideration in public law cases — Matter of considerable interest to Canadians — Continuing public debate over Canada’s role as nuclear technology vendor — Court not satisfied need for confidentiality exceeding public interest in open justice — Conclusion reached without examining voluminous documents on technical aspects of nuclear installation as Judge would be no wiser from perusal.

This was an in camera application for leave pursuant to Federal Court Rules, 1998, rule 312 to file an additional affidavit, containing as exhibits certain documents; and for a confidentiality order pursuant to rule 151 in respect of this application, the additional affidavits and confidential documents. The motion arose in the course of an application by Sierra Club for judicial review of the decision by the Government of Canada to provide financial assistance with respect to the sale of nuclear reactors by AECL to the People’s Republic of China. In its initial response to Sierra Club’s application, AECL filed the affidavit of a senior AECL manager, wherein he referred to and summarized certain documents prepared for purposes of the Chinese regulatory process (the confidential documents). Prior to cross-examination on the affidavit, Sierra Club applied for the production of the documents themselves, but they were not disclosed for various reasons, including the fact that they belonged to the Chinese authorities, who had not authorized their disclosure. AECL has since obtained authorization to disclose the documents, but only if they are protected by a confidentiality order. Canadian Environmental Assessment Act (CEAA), paragraph 5(1)(b) requires an environmental assessment of a project before a federal authority provides financial assistance for the purpose of enabling it to proceed. Sierra Club submitted that paragraph 5(1)(b) applied to the memorandum of authorization authorizing certain financial transactions, and that an environmental assessment was required. AECL’s position was that the CEAA does not apply to Crown corporations, and that the memorandum of authorization does not fall within the terms of section 5. AECL further said that it required the documents to defend itself against the possibility that Sierra Club will argue that CEAA subsection 8(1) applies to this transaction, or that it will invoke section 54. In either case, AECL would rely on the content of the confidential documents to show that an assessment of the environmental effects of the project had been completed. Finally, AECL submitted that the confidential documents were relevant to the question of remedies. Sierra Club opposed production of the documents on the grounds that they were not relevant and that their introduction at this point would unnecessarily delay the proceedings even further.

Held, the application for leave to file the supplementary affidavit and confidential documents should be granted, and the application for a confidentiality order should be dismissed.

(1) The main concerns in the application of rule 312 are whether the additional material would serve the interests of justice, assist the Court, and not seriously prejudice the other side. Whether the introduction of the documents serve the interests of justice and assist the Court is a question of relevance. If the documents will permit the Court to have before it evidence which is material to an issue to be decided, then the interests of justice are served, unless prejudice to another party can be shown.

The confidential documents were relevant to the issue of the appropriate remedy. Section 5 provides that if one of the enumerated conditions arises, an environmental assessment must be performed. An environmental assessment is an assessment conducted pursuant to the terms of the Act. The confidential documents were not an environmental assessment within the meaning of the Act. However, AECL apparently sought to argue that, on the basis of a variety of factors, including the confidential documents, the Court ought not to make any order, on the ground that any order would be essentially futile. AECL argued that it is redundant to repeat what others (Chinese authorities) have done in circumstances where Canadian authorities have no jurisdiction over the works, or because the Chinese regulatory process is the functional equivalent of an environmental assessment so that the spirit of the legislation has been complied with. Sierra Club argued that relief should not be denied on the ground of futility.

Any prejudice caused to Sierra Club would arise from delay which will have impact upon the arguments to be made by AECL, e.g. the advanced state of the completion of the works or the state of the financial commitments. The delay in bringing the documents forward has been explained; it was not attributable to indolence on the part of AECL. The delay caused by the introduction of these documents, while undesirable, is balanced by the desirability of having the entire record before the Court. Leave was granted to serve and file the supplementary affidavit and the confidential documents.

(2) Under rule 151 the Court may order that material to be filed shall be treated as confidential, provided it is satisfied that the need for confidentiality is greater than the public interest in open and accessible court proceedings. This is a matter of considerable interest to a large number of Canadians. The issues are in the public domain and are not simply a matter of individual rights, though AECL’s business could potentially be affected by the result. All of this suggests that these proceedings should be open and public. On the other hand, the documents in question are the property of the Chinese authorities and AECL does not have permission to put the documents into the record unless they are protected by a confidentiality order.

Confidentiality orders, while permitted by the rules, are an exception to the rule of open access to the courts. There is a subjective element to the test developed in patent cases for the granting of a confidentiality order: the applicant must show a belief that the information in question is confidential and that its interests would be harmed by disclosure. That element was met—AECL clearly believed that disclosure of the documents will be harmful to its competitive position. The second part of the test is that the person claiming the benefit of the order must demonstrate, on an objective basis, that the order is required. To so demonstrate, the information must have been treated by the party at all relevant times as confidential, and the asserting party must demonstrate that, on a balance of probabilities, its proprietary, commercial and scientific interests could reasonably be harmed by the disclosure of the information. The second part of the test was satisfied. The information was consistently treated as confidential by both AECL and the Chinese authorities. Also on a balance of probabilities, disclosure of the information could harm AECL’s commercial interests. However, in public law cases, the objective test should have a third component, which is whether the public interest in disclosure exceeds the risk of harm to a party arising from disclosure. It was significant that this issue arose in the context of voluntary tendering of documents to advance a party’s cause, not in the context of mandatory production of documents. Where production is mandatory, it is easier to justify a limit to public access to information which a party is not free to withhold and it can be shown that harm will result from disclosure. But where a party has the luxury of choosing whether or not to produce a document, the content of the document may be capable of being put into evidence in a different form or other documents may be available to prove the same facts. The claims of open justice may weigh more heavily in the balance in cases of voluntary tendering than it does in those where there is no element of voluntariness.

But for the fact that it is an intervener at its own request, AECL is an involuntary participant in the process. The documents which it wishes to put before the Court were prepared by others for other purposes. It is bound by its commercial interests, and its customer’s property rights, to respect the Chinese authorities’ disinclination to allow the documents to be filed without the benefit of a confidentiality order. The problem might be solved by expunging from the material filed those parts whose disclosure the Chinese authorities consider to be detrimental to their interests. Taking all of the above into account, the need for confidentiality did not exceed the public interest in open justice. The issue of Canada’s role as a vendor of nuclear technology is one of significant public interest. The burden of justifying a confidentiality order in such circumstances is very onerous. While the documents contain sensitive information, it is not the sensitive information which would be of interest to the Court. AECL has the option of expunging the sensitive material from the documents which it proposes to file. It will not be prevented from mounting a full defence by the absence of a confidentiality order except to the extent that it chooses not to put the evidence, in some form, before the Court. At the same time, the public will benefit from the open access to court proceedings.

The Court did not examine the confidential documents, notwithstanding case law to the effect that a judge should not deal with the issue of a confidentiality order without reviewing the documents themselves. Since the documents were voluminous and dealt with technical aspects of a nuclear installation, a judge would be none-the wiser for perusing them and unable to assess them in context.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canadian Environmental Assessment Act, S.C. 1992, c. 37, ss. 5(1), 8(1), 54(2).

Federal Court Rules, 1998, SOR/98-106, rr. 151, 312.

CASES JUDICIALLY CONSIDERED

APPLIED:

Fogal et al. v. Canada et al. (1999), 161 F.T.R. 121 (F.C.T.D.); AB Hassle v. Canada (Minister of National Health and Welfare) (1998), 83 C.P.R. (3d) 428; 161 F.T.R. 15 (F.C.T.D.).

DISTINGUISHED:

Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3; (1992), 88 D.L.R. (4th) 1; [1992] 2 W.W.R. 193; 84 Alta. L.R. (2d) 129; 3 Admin. L.R. (2d) 1; 7 C.E.L.R. (N.S.) 1; 132 N.R. 321.

CONSIDERED:

Eli Lilly and Co. v. Novopharm Ltd. (1994), 56 C.P.R. (3d) 437; 82 F.T.R. 147 (F.C.T.D.); Maislin Industries Limited v. Minister for Industry, Trade and Commerce, [1984] 1 F.C. 939 (1984), 10 D.L.R. (4th) 417; 8 Admin. L.R. 305; 27 B.L.R. 84 (T.D.); Eli Lilly and Co. v. Interpharm Inc. (1993), 50 C.P.R. (3d) 208; 156 N.R. 234 (F.C.A.).

APPLICATION in camera for (i) leave to file an additional affidavit, to which will be attached as exhibits certain documents for which authorization to disclose has been granted by the Chinese authorities only if they are protected by a confidentiality order, and (ii) a confidentiality order in respect of this application, the additional affidavits and confidential documents. Application for leave granted, but application for confidentiality order denied.

APPEARANCES:

Timothy J. Howard for applicant.

Brian J. Saunders for respondents.

Peter J. Chapin and Brett G. Ledger for intervener.

SOLICITORS OF RECORD:

Sierra Legal Defence Fund, Vancouver, for applicant.

Deputy Attorney General of Canada for respondents.

Osler, Hoskin & Harcourt, Toronto, for intervener.

The following are the reasons for order and order rendered in English by

[1]        Pelletier J.: AECL [Atomic Energy of Canada Limited] bring this application, which was heard in camera pursuant to an order of this Court, in which it seeks

— leave to file an additional affidavit to which will be attached as exhibits certain documents (the confidential documents); and

— a confidentiality order in respect of this application, the additional affidavit and confidential documents and this order.

[2]        This motion arises in the course of an application brought by Sierra Club to set aside the funding arrangements underlying the sale of nuclear reactors by AECL to the People’s Republic of China. In its initial response to Sierra Club’s application, AECL filed the affidavit of Dr. Simon Pang, a senior AECL manager. Dr. Pang referred to and summarized certain documents prepared for purposes of the Chinese regulatory process. These documents are the confidential documents. Prior to cross-examining Dr. Pang on his affidavit, Sierra Club made an application for the production of the documents themselves, arguing that it could not test Dr. Pang’s evidence without having access to the documents. AECL resisted production on various grounds including the fact that the documents were the property of the Chinese authorities and that it did not have authority to disclose them. The documents were not disclosed at that time. AECL has now received authorization to disclose the documents but only if they are protected by a confidentiality order, hence this application. Sierra Club now opposes the production of these documents on the ground that they are not relevant and that their introduction at this point will unnecessarily delay the proceedings even further.

[3]        The confidential documents could have been filed without objection at the time that Dr. Pang’s original affidavit was filed. The only issue would have been the confidentiality order. Given that leave is now required to file the documents pursuant to rule 312 [Federal Court Rules, 1998, SOR/98-106],[1] what new considerations enter into play?

[4]        The principles governing the application of rule 312 were succinctly reviewed by Prothonotary Hargrave in Fogal et al. v. Canada et al. (1999), 161 F.T.R. 121 (F.C.T.D.) [at page 124] in which he identified that “the main concerns ought to be whether the additional material will serve the interests of justice, will assist the Court and will not seriously prejudice the other side.” There is, in addition, always a concern that the summary nature of a judicial review application will be subverted by the piling on of paper. On the other hand, the fact that an application for judicial review is a summary procedure does not mean that the issues involved lend themselves to summary disposition. Where complex transactions are sought to be set aside on the ground that they offend a significant piece of legislation, even a summary procedure may be ponderous.

[5]        Whether the introduction of the documents will serve the interests of justice and assist the Court is, in this case, a question of relevance. If the documents are not relevant to the issues to be decided in the application, they will not advance justice nor assist the Court. If the documents will permit the Court to have before it evidence which is material to an issue to be decided, then it can be said that the interests of justice are served, unless prejudice to another party can be shown.

[6]        In this case, the documents are said to be relevant to the application of sections 8[2] and 54[3] of the Canadian Environmental Assessment Act, S.C. 1992, c. 37 to this dispute and to the question of remedies. Sierra Club seeks judicial review of the decision of the Government of Canada to provide financial assistance with respect to the sale of Candu reactors by AECL to the People’s Republic of China. Her Majesty and AECL have agreed that the decision under review is a memorandum of authorization dated November 8, 1996 signed by the Ministers of Finance and International Trade authorizing certain financial transactions. AECL is not a party to that agreement but the decision under review could hardly be any other as far as it is concerned. The notice of application describes the basis of the application as follows:

GROUNDS AND MATTER FOR JUDICIAL REVIEW

6. This Application is based on the grounds set out hereinafter.

7. All of the essential and sufficient elements exist to engage the legal requirement of environmental assessment of the project pursuant to CEAA, including by virtue of s. 5(1) thereof. There is a “federal authority” (more than one), a “project” as defined and a trigger for such environmental assessment in the form of the financial assistance.

…

ENVIRONMENTAL ASSESSMENT REQUIRED UNDER CEAA

19. CEAA is engaged and a full environmental assessment is required, notably pursuant to s. 5(1)b) thereof, when as a matter of fact and practical reality, federal authorities are to exercise or exercise powers, duties, or functions with respect to financial assistance for the purpose of enabling a project to be carried out, in whole or in part. That is the case here.

20. Subsection 8(2) of CEAA does not apply here to preclude the required environmental assessment pursuant to CEAA, including notably paragraph 5(1)b) thereof.

[7]        Paragraph 5(1)(b) of the Canadian Environmental Assessment Act provides as follows:

5. (1) An environmental assessment of a project is required before a federal authority exercises one of the following powers or performs one of the following duties or functions in respect of a project, namely, where a federal authority

…

(b) makes or authorizes payments or provides a guarantee for a loan or any other form of financial assistance to the proponent for the purpose of enabling the project to be carried out in whole or in part, except where the financial assistance is in the form of any reduction, avoidance, deferral, removal, refund, remission or other form of relief from the payment of any tax, duty or impost imposed under any Act of Parliament, unless that financial assistance is provided for the purpose of enabling an individual project specifically named in the Act, regulation or order that provides the relief to be carried out;

[8]        As can be seen, Sierra Club’s position is that paragraph 5(1)(b) applies to the memorandum of authorization and that, as a result, an environmental assessment is required. AECL takes the position that the Act as a whole does not apply to Crown corporations such as AECL and that, in any event, the memorandum of authorization does not fall within the terms of section 5. It can be seen that both positions turn on an interpretation of the Act and of the memorandum of authorization. Questions of the nature and scope of the Chinese regulatory process are irrelevant to the resolution of this question.

[9]        However, AECL goes further and says that it requires the documents in order to defend itself against the possibility that Sierra Club will argue that subsection 8(1) also applies to this transaction. AECL points to the inclusive language in the notice of application which would allow Sierra Club to do this. If Sierra Club does attempt to invoke section 8, AECL intends to rely on the content of the confidential documents to show that an assessment of the environmental effects of the project has in fact been completed. Further, AECL is concerned that Sierra Club will invoke section 54 of the Act in the event that the two previous arguments have not met with success. In that case, AECL wants to be able to argue that the confidential documents are an assessment that is consistent with the requirements of the Act.[4] Finally, AECL says that the confidential documents are relevant to the question of remedies. AECL’s position is that even if Sierra Club is right on the issue of the scope of the Act, it does not follow that the Court ought to make the order requested.

[10]      If the documents are allowed to be filed because they are relevant to one issue, they will be available to support any other issue which may be before the Court. It is therefore not necessary for me to decide to which issues they are not relevant since, once admitted, they will be available for all purposes. It is only necessary for me to find an issue to which they are relevant.

[11]      I find that the confidential documents are relevant to the issue of the appropriate remedy. Section 5 provides that if one of the enumerated conditions arises, an environmental assessment must be performed. An environmental assessment is an assessment conducted pursuant to the terms of the Act. There is no room to argue that the confidential documents are an environmental assessment within the meaning of the Act. However, AECL appears to wish to argue that, on the basis of a variety of factors, including the confidential documents, the Court ought not to make any order, even if Sierra Club is successful, on the ground that any order would be essentially futile. AECL’s position is that it is redundant to repeat what others have done in circumstances where Canadian authorities have no jurisdiction over the works themselves. Alternately, AECL may wish to argue that while the Chinese regulatory process is not an environmental assessment within the meaning of the Act, it is the functional equivalent of such an assessment so that the spirit of the legislation has been complied with. The confidential documents would be relevant to both of these arguments.

[12]      Sierra Club argues that it is not for the Court to decide the adequacy of the Chinese regulatory process and that the issue is not control over the works but control over government funding. It also takes the position that relief is not to be refused on the ground of futility. It invokes and relies upon certain dicta of La Forest J. in Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3 in which he says [at page 80]:

Prerogative relief should only be refused on the ground of futility in those few instances where the issuance of the prerogative writ would be effectively nugatory. For example a case where the order could not possibly be implemented…. It is a different matter, though, where it cannot be determined a priori that an order in the nature of prerogative relief will have no practical effect.

[13]      La Forest J. goes on to say in the sentence which follows the one quoted above:

In the present case, … it is not at all obvious that the implementation of the Guidelines Order even at this late stage will not have some influence over the mitigative measures that may be taken to ameliorate any deleterious environmental impact from the dam on an area of federal jurisdiction.

In this case, Canadian authorities are not in a position to recommend or enforce mitigative measures because the works are on the territory of and under the control of another state. To that extent, there may be an element of futility which was not present in the Oldman River case. That will be for the judge hearing the application to decide. As a result, I find that the supplementary affidavit and confidential documents are relevant to a matter in issue and that, absent evidence of prejudice to Sierra Club, they ought therefore to be allowed to be served and filed.

[14]      What is the evidence of prejudice to Sierra Club if the supplementary affidavit and confidential documents are served and filed? The prejudice will arise from delay, which in turn will have an impact upon arguments to be made by AECL, for example, the advanced state of completion of the works by the time the application is finally heard. On the other hand, it remains to be seen whether it is the state of the works, or the state of the financial commitments contemplated by the memorandum of authorization which will be determinative of the issue of futility.

[15]      To the extent that there has been delay prior to this point, it has been caused, in part, by the bringing of interlocutory motions; both AECL and Sierra Club have initiated such motions. The delay in bringing the documents forward has been explained; it is not attributable to indolence on the part of AECL. In the result, I find that the delay caused by the introduction of these documents, while undesirable, is balanced by the desirability of having the entire record before the Court. For that reason there will be an order granting AECL leave to serve and file the supplementary affidavit of Dr. Simon Pang and the confidential documents.

[16]      The next issue is AECL’s request for a confidentiality order pursuant to rule 151 of the Federal Court Rules, 1998:

151. (1) On motion, the Court may order that material to be filed shall be treated as confidential.

(2) Before making an order under subsection (1), the Court must be satisfied that the material should be treated as confidential, notwithstanding the public interest in open and accessible court proceedings.

[17]      Before such an order can be made, I must be satisfied that the need for confidentiality is greater than the public interest in open and accessible court proceedings. The argument for open proceedings in this case is significant. This is a matter of considerable interest to a large number of Canadians. There has been a long-running public debate about Canada’s role as a vendor of nuclear technology, in which this application is but the latest skirmish. The issues are within the public domain and are not simply a matter of individual rights, though AECL’s business could potentially be affected by the result. All of this suggests that these proceedings should be open and public.

[18]      On the other hand, the material before me establishes that the documents in question are the property of the Chinese authorities and AECL does not have permission to put the documents into the record unless they are protected by a confidentiality order. I have been told that the confidential documents will not be filed without the benefit of a confidentiality order.

[19]      Confidentiality orders while permitted by the rules are an exception to the rule of open access to the courts. Muldoon J. expressed it aptly in Eli Lilly and Co. v. Novopharm Ltd. (1994), 56 C.P.R. (3d) 437 (F.C.T.D.) when he said [at page 439]:

An order of this sort goes against the inherent nature and constitutional imperatives of this Court. It is an affront which is to be suffered by the Court only in instances of dire, demonstrated need, if ever at all.

[20]      The same sentiments were expressed by Jerome A.C.J. in Maislin Industries Limited v. Minister for Industry, Trade and Commerce, [1984] 1 F.C. 939 (T.D.) [at page 942]:

On the subject of closed hearings, proceedings in our courts must take place in full public view and in the presence of all parties. Exceptions to this principle occur from time to time, but must be kept to the minimum of absolute necessity. Even then, directions should be such as to safeguard the public interest in the administration of justice, and the rights of any parties not permitted to participate.

[21]      As to the test for the granting of such an order, there is a body of case law arising out of patent litigation which prescribes the conditions for the issue of what is referred to as a protective order, which is essentially a confidentiality order. The applicant must show a belief that the information in question is confidential and that its interests would be harmed by disclosure. This is the subjective element. If the order is challenged, then the person claiming the benefit of the order must demonstrate, on an objective basis, that the order is required. See AB Hassle v. Canada (Minister of National Health and Welfare) (1998), 83 C.P.R. (3d) 428 (F.C.T.D.).

[22]      In this case, the subjective element of the test has been satisfied. It is clear that AECL believes that disclosure of the documents will be harmful to its competitive position. The issue is whether the objective leg of the test has been satisfied. In AB Hassle, supra, Tremblay-Lamer J. identified a two-part test for the objective element [at page 434]:

In my opinion, the proper test at this stage is also two- fold. First, it requires that the information has been treated by the party at all relevant times as confidential. It would make no sense to maintain that information is confidential when the party has not treated it as such.

Second, it requires the asserting party to demonstrate that on a balance of probabilities, its proprietary, commercial and scientific interests could reasonably be harmed by the disclosure of the information.

[23]      In my view, the objective test, as characterized above, has been satisfied. It is clear that the information has consistently been treated as confidential by both AECL and the Chinese authorities. I am also satisfied, on a balance of probabilities, that disclosure of the information could harm AECL’s commercial interests. However, I am also of the view that in public law cases, the objective test has, or should have, a third component which is whether the public interest in disclosure exceeds the risk of harm to a party arising from disclosure.

[24]      It is very significant to the resolution of this issue that it does not arise in the context of mandatory production of documents, as would be the case in an action, but in the context of voluntary tendering of documents to advance a party’s cause. Where production is mandatory, the need for a confidentiality order is more easily grasped: the disclosure is involuntary and the information has otherwise been kept in confidence. It is easier to justify a limit to public access to information which a party is not free to withhold and it can be shown that harm will result from disclosure. But where a party has the luxury of choosing whether or not to produce a document at all, the same considerations do not apply. The content of the document may be capable of being put into evidence in a different form; other documents may be available to prove the same facts. In such a context, a confidentiality order is sought to protect a tactical decision. Which is not to say that these tactical decisions are without significance to the party. Some very significant interests may be engaged by these decisions, as is the case here. There is also a public interest in allowing parties to make a full defence to claims which affect their interests. However, a party’s tactical decision to produce or withhold certain documents lacks the appeal to fairness which underlies the protection of information disclosed involuntarily. This is not to say that such orders should not be granted, but that the claims of open justice may weigh more heavily in the balance in these cases than it does in those where there is no element of voluntariness.

[25]      This distinction reflects the position taken by Federal Court of Appeal with respect to the implied undertaking which attaches to material obtained in the course of pre-trial discovery to the effect that the information will only be used for purposes of the litigation. In Eli Lilly and Co v. Interpharm Inc. (1993), 50 C.P.R. (3d) 208, the Federal Court of Appeal had to deal with an order which permitted the plaintiff in an infringement action to use information contained in an affidavit filed by the defendant in response to an application for an interlocutory injunction to be used in collateral proceedings. The issue was whether the implied undertaking applied to that material. The Court held [at page 213] that it did not:

I am of the view that no implied undertaking should attach to materials filed with the court voluntarily by way of affidavits or in statements of fact and law.

[26]      While the case is relevant by analogy only, it does make the point that information voluntarily tendered stands on a different footing than information disclosed under compulsion.

[27]      AECL is in the position of a respondent in the present proceedings in that another party has initiated proceedings to which it must respond. But for the fact that it is an intervener in the action at its own request, it could be seen as an involuntary participant in the process. The documents which it wishes to put before the Court were prepared by others for other purposes. It is bound by its commercial interests, and its customer’s property rights, to respect the Chinese authorities disinclination to allow the documents in question to be filed without the benefit of a confidentiality order. The problem might be solved by expunging from the material filed those parts whose disclosure the Chinese authorities consider to be detrimental to their interests. There is other material in the documents whose disclosure would affect AECL’s commercial interests. Once again, the possibility of expungement of the material appears as a possibility.

[28]      It seems that this material is subject to a freedom of information request in the United States. One cannot presume that U.S. application will succeed but if it does, any confidentiality order made by this Court would have the effect of preventing Canadians from knowing what the rest of the world knows.

[29]      Finally, in considering the necessity of a confidentiality order, one can consider the issue of materiality again, but from another perspective. Assuming that the question of harm to AECL’s interest from disclosure is settled in AECL’S favour, then the rationale for a confidentiality order varies with materiality. If the documents can be shown to be very material to a critical issue, the requirements of justice militate in favour of a confidentiality order. If the documents are marginally relevant, then the voluntary nature of the production argues against a confidentiality order. I have already decided that the supplementary affidavits and confidential documents are material to the question of appropriate remedy, which is a significant issue in the event that AECL fails on the main issue.

[30]      Pulling these threads together, the following picture emerges. AECL wishes to advance an argument that the Chinese regulatory process has effectively accomplished the same objectives as an environmental assessment under the Act and, as a result, no useful purpose would be served by ordering such an assessment. To do so, it wishes to file certain documents arising out of the Chinese regulatory process, documents which the Chinese authorities do not wish to become part of the public record and which also contain information whose disclosure could be harmful to AECL’s competitive position. There is no evidence before me as to how the relevant evidence could be put before the Court in other ways which would not require a confidentiality order but the possibility of expunging the sensitive information must be taken to be an option. The documents are material to one aspect of an important issue, appropriate remedy. There may well be other considerations which impact upon the order made in the event Sierra Club is successful, such as the state of completion of the works, the possibility of mitigative measures, the nature of the commitments undertaken pursuant to the memorandum of authorization. The question of appropriate remedy may not turn exclusively upon the equivalence of the Canadian and Chinese regulatory processes.

[31]      Taking all of these into account, I am not satisfied that the need for confidentiality exceeds the public interest in open justice. The issue of Canada’s role as a vendor of nuclear technology is one of significant public interest, with animated positions being taken on both sides of the question. The burden of justifying a confidentiality order in such circumstances is very onerous. While the documents contain sensitive information, nothing has been shown to me which would suggest that it is the sensitive information which would be of interest to the Court. AECL has the option of expunging the sensitive material from the documents which it proposes to file. It will not be prevented from mounting a full defence by the absence of a confidentiality order except to the extent that it chooses not to put the evidence, in some form, before the Court. While the documents are material, they are material to an issue which has several aspects, and the absence of this material, if that is AECL’s choice, will not prevent it from making an equivalent argument on other aspects of the same issue, e.g. no order ought to be made because a Canadian environmental assessment would be futile since mitigative measures could not be implemented given that the works are under the control of a sovereign state. In the end, I am satisfied that AECL will still have a full right of defence without the confidentiality order which it seeks. At the same time, the public will benefit from the open access to court proceeding.

[32]      I have come to this conclusion without examining the confidential documents though I have had the benefit of reading Dr. Pang’s affidavits. I am aware that there is a line of cases which holds that a judge ought not to deal with the issue of a confidentiality order without reviewing the documents themselves. In this case, the confidential documents were not put before me, no doubt as a result of an earlier ruling in which I held that they were not to be provided to me unless they were also provided to Sierra Club’s solicitors upon terms which would protect their confidentiality while this motion was pending. I also expressed my view at the time that I would be unable to assess the documents in context, a view which I continue to hold. The confidential documents consist of a series of voluminous papers dealing with the technical aspects of a nuclear installation. I would be none the wiser for perusing these documents since I have no way of knowing what is in the public domain and what is not, the degree of sensitivity of certain information in the marketplace, or the well-foundedness of the concerns of the Chinese authorities. I have for the most part accepted the submissions made to me on these issues at face value.

[33]      It would not be fair to AECL to simply dismiss this part of its motion without addressing the question of further filings. I will order that it has leave to file the supplementary affidavit and the confidential documents. For greater certainty, I will confirm that AECL is entitled to the return of the confidential material which it filed for the purposes of this motion. I will also order that AECL has leave to file edited versions of the confidential documents should it choose to do so. If AECL does not file the supplementary affidavit or confidential documents, edited or unedited, it shall have leave to file material dealing with the Chinese regulatory process in general and with the regulatory process as it applied to this project, providing it does so within 60 days of the date of this order. I extend this relief to AECL to avoid the necessity of another motion. I have already decided that such material would be material to an issue in the cause. I have indicated that AECL could meet its evidentiary objectives by putting the content of the confidential documents before the Court in another fashion. In the interests of avoiding another motion on issues which I have already dealt with, leave will be granted to file additional material, providing that it is served and filed within 60 days of the date of these reasons. Any objection to the content or relevance of this additional material shall be made to the judge hearing the application.

[34]      At the hearing of this matter, AECL and Sierra Club agreed that if the supplementary affidavit and confidential documents were filed, certain ameliorative conditions which Sierra Club requested would be put in place. If there is agreement on these matters, I ask the parties to forward their written agreement to me and I will incorporate it into an order. If there is no agreement, I will issue a supplementary order dealing with issues such as the travelling expenses of Dr. Pang should he attend at a cross-examination on his affidavit.

ORDER

It is hereby ordered that:

(1) AECL has leave to serve and file the supplementary affidavit of Simon Pang and the confidential documents referred to therein, either in their original form or edited to remove information which AECL deems to be confidential.

(2) If AECL chooses not to file the confidential documents, it has leave to file additional material dealing with the nature and scope of the nuclear regulatory process in the People’s Republic of China, both in general terms and as it applies to the project which is the subject of these proceedings, providing such material is served and filed within 60 days of the date of this order. Any objection to the content or relevance of this additional material shall be made to the judge hearing the application.

(3) AECL’s application for a confidentiality order pursuant to rule 151 is dismissed.

(4) There will be a telephone case management conference following the conclusion of the 60-day period referred to in paragraph 2.

(5) The costs of the motion shall be costs in the cause.

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