T-2560-83
Maislin Industries Limited (Applicant)
v.
The Honourable Minister for Industry, Trade and
Commerce, Regional Economic Expansion (now
the Honourable Minister for Regional and Indus
trial Expansion) and Iain Hunter (Respondents)
Trial Division, Jerome A.C.J.—Ottawa, Novem-
ber 2, 15, 1983, January 18 and May 9, 1984.
Access to information — Third party review application —
Respondent Hunter requesting access to report forming basis
for recommendations regarding advisability of granting loan
guarantees to applicant — Minister finding portions of report
exempt from disclosure by virtue of ss. 19 and 20 of the Act —
Minister severing and disclosing portions of report not exempt
from disclosure pursuant to s. 25 — Minister advising of
decision to disclose non-exempted parts of report in conformi
ty with s. 28(1) — Applicant's opposition to disclosure rejected
— Applicant seeking review of Minister's decision pursuant to
s. 44 — Hearings in camera as issue is confidentiality —
Counsel for Hunter permitted access to disputed portion for
argument upon undertaking not to disclose contents even to
client — Burden of proof on party resisting disclosure —
Doubt to be resolved in favour of disclosure — Applicant
submitting material in dispute 'financial, commercial, scien
tific or technical information" fulfilling requirements of s.
20(1)(b) — Applicant alleging material treated in confidential
manner by it, and disclosure resulting in serious financial loss
and adversely affecting company's future commercial and
financial transactions — Minister claiming not all information
treated confidentially and historical financial information
matter of public record — Minister submitting objective test of
confidentiality — Question of fact whether information kept
confidential by both parties — Report not exempt from disclo
sure under s. 20(1)(c) based on cross-examinations showing
sources of public access to information — S. 20(1)(b) estab
lishing twofold test: (1) information contained in record must
be confidential in nature and (2) information must be consist
ently treated in confidential manner by third party — Appli
cant failing to establish that according to objective standards
information confidential in nature — Access to Information
Act, S.C. 1980-81-82-83, c. 11I, Schedule 1, ss. 2(1), 19, 20,
25, 44.
CASE JUDICIALLY CONSIDERED
CONSIDERED:
National Parks and Conservation Association v. Morton,
et al. 498 F.2d 765 (D.C. Cir. 1974).
COUNSEL:
H. Lamed for applicant.
B. Mcisaac and H. Black for respondent Min
ister for Regional and Industrial Expansion.
R. Dearden for respondent Iain Hunter.
SOLICITORS:
Lapointe, Rosenstein, Montreal, for appli
cant.
Deputy Attorney General of Canada for
respondent Minister for Regional and Indus
trial Expansion.
Gowling & Henderson, Ottawa, for respond
ent Iain Hunter.
The following are the reasons for order ren
dered in English by
JEROME A.C.J.: This is the first third party
review application brought pursuant to the Access
to Information Act, S.C. 1980-81-82-83, c. 111
[Schedule I], and in particular to section 44:
44. (1) Any third party to whom the head of a government
institution is required under paragraph 28(5)(b) or subsection
29(1) to give a notice of a decision to disclose a record or a part
thereof under this Act may, within twenty days after the notice
is given, apply to the Court for a review of the matter.
The facts are not in dispute. On July 13, 1983,
the respondent, Iain Hunter, filed with the Minis
ter of Industry, Trade and Commerce (now known
as the Minister for Regional and Industrial Expan
sion), in a form provided by the statute, a request
for access to the following record:
All reports and studies undertaken as the basis on which
recommendations were made regarding the advisability of
granting $34 million in loan guarantees to Maislin Industries
Ltd.
The report in issue here was prepared by an
independent consulting firm and it bears the title
"Report on Review of Maislin Transport, March
1982". After reviewing the record, the Minister
determined that certain portions of it were exempt
from disclosure by virtue of sections 19 and 20 of
the Act:
Personal Information
19. (1) Subject to subsection (2), the head of a government
institution shall refuse to disclose any record requested under
this Act that contains personal information as defined in sec
tion 3 of the Privacy Act.
(2) The head of a government institution may disclose any
record requested under this Act that contains personal informa
tion if
(a) the individual to whom it relates consents to the
disclosure;
(b) the information is publicly available; or
(c) the disclosure is in accordance with section 8 of the
Privacy Act.
Third Party Information
20. (1) Subject to this section, the head of a government
institution shall refuse to disclose any record requested under
this Act that contains
(a) trade secrets of a third party;
(b) financial, commercial, scientific or technical information
that is confidential information supplied to a government
institution by a third party and is treated consistently in a
confidential manner by the third party;
(c) information the disclosure of which could reasonably be
expected to result in material financial loss or gain to, or
could reasonably be expected to prejudice the competitive
position of, a third party; or
(d) information the disclosure of which could reasonably be
expected to interfere with contractual or other negotiations
of a third party.
The Minister further determined that other por
tions of the report were not exempt from disclosure
and, in accordance with section 25 of the Act,
decided to sever those portions of the study which
were exempt from disclosure.
25. Notwithstanding any other provision of this Act, where a
request is made to a government institution for access to a
record that the head of the institution is authorized to refuse to
disclose under this Act by reason of information or other
material contained in the record, the head of the institution
shall disclose any part of the record that does not contain, and
can reasonably be severed from any part that contains, any
such information or material.
The Minister then advised Maislin by letter
dated August 23, 1983, of his decision to disclose
the non-exempted parts of the report in conformity
with subsection 28(1) of the Act. Maislin opposed
that decision and submitted to the Minister written
reasons why the report or parts of it should not be
disclosed. The Minister rejected these and formal
ly informed Maislin of his intention to disclose the
non-exempt portions. Notice of motion was filed
with this Court on November 15, 1983, by which
Maislin seeks to have the Minister's decision
reviewed and set aside by this Court pursuant to
section 44 of the Act.
Since this is the first motion of this nature, there
were several procedural questions to be resolved,
and I heard counsel at some length on the matter
of directions, including in camera hearings, burden
of proof and cross-examination on affidavits filed.
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 partici
pate. In applications under these access to infor
mation statutes, the issue is confidentiality, and
obviously to conduct them in public view pre
empts the final decision. For the present, therefore,
there does not seem to be any alternative but to
restrict attendance to counsel for the parties.
A similar dilemma arises with the question of
access to the disputed documents by counsel (in
this case for Hunter). Obviously, counsel cannot
be expected to argue intelligently on the nature of
a document he has not seen, yet to provide unre
stricted access could predetermine the central
issue. This determination will vary with the cir
cumstances of each case, but here, having exam
ined the full text of the report, I considered it
appropriate to accept counsel's undertaking of
non-disclosure, even to his client, and to allow him
access to the disputed portion solely for the pur
pose of argument. Otherwise, it seemed necessary
that it remain filed in a sealed envelope until final
disposition of this motion.
There was no disagreement that the burden of
proof rests upon the applicant Maislin. It should
be emphasized however, that since the basic prin
ciple of these statutes is to codify the right of
public access to Government information two
things follow: first, that such public access ought
not be frustrated by the courts except upon the
clearest grounds so that doubt ought to be resolved
in favour of disclosure; second, the burden of
persuasion must rest upon the party resisting dis
closure whether, as in this case, it is the private
corporation or citizen, or in other circumstances,
the Government. It is appropriate to quote subsec
tion 2(1):
2. (1) The purpose of this Act is to extend the present laws of
Canada to provide a right of access to information in records
under the control of a government institution in accordance
with the principles that government information should be
available to the public, that necessary exceptions to the right of
access should be limited and specific and that decisions on the
disclosure of government information should be reviewed
independently of government.
In this application, I directed Maislin to file
affidavit evidence in support and in turn, ordered
that both respondents have the opportunity to
cross-examine. All of these procedural decisions
were endorsed upon the notice of motion Novem-
ber 25, 1983. Counsel's final arguments were pre
sented January 18, 1984.
The test then, is whether the Maislin submission
persuades me that the portion of the report in issue
which the respondent Minister is prepared to dis
close to the respondent Iain Hunter is exempt from
disclosure pursuant to paragraphs 20(1)(b) and
20(1) (d) of the Access to Information Act.
Third Party Information
20. (1) Subject to this section, the head of a government
institution shall refuse to disclose any record requested under
this Act that contains
(b) financial, commercial, scientific or technical information
that is confidential information supplied to a government
institution by a third party and is treated consistently in a
confidential manner by the third party;
(d) information the disclosure of which could reasonably be
expected to interfere with contractual or other negotiations
of a third party.
The Maislin submission contends that on the
face of the record, the material submitted in sup-
port of the application for loan guarantees was
"financial, commercial, scientific or technical
information" detailing the operations of the Mais-
lin Trucking Group, and thereby fulfilled the
requirements of paragraph 20(1)(b) of the Act.
Counsel also argues that the material has been at
all material times treated in a confidential manner
by this company, and that the disclosure of the
disputed record would result in serious financial
loss and have an adverse effect on the company's
future commercial and financial transactions, par
ticularly in regard to ongoing operations of the
company's subsidiaries.
The respondent Minister claims that not all of
the information, when considered separately, has
been consistently treated as confidential material
and in any event, all historical financial informa
tion contained in the record has been published at
one time or another in Maislin financial state
ments. In addition, it is not enough for Maislin to
treat the information confidentially, but that it
must in fact be confidential by some objective
standard. The respondent, Hunter, submits that
the intent of the Act is to provide access to infor
mation and not to prevent it, so that exemptions
should be "limited and specific" and that confiden
tiality should not be determined on the basis of the
subjective considerations of Maislin, but rather in
accordance with an objective test, as for example
in the United States Court of Appeals in the case
of National Parks and Conservation Association
v. Morton, et al.' in which Tamm J. said at page
770:
To summarize, commercial or financial matter is confidential
for purposes of the exemption if disclosure of the information is
likely to have either of the following effects: (1) to impair the
Government's ability to obtain necessary information in the
future; or (2) to cause substantial harm to the competitive
position of the person from whom the information was
obtained.
The question here is primarily one of fact. It is
not sufficient that Maislin considered the informa
tion to be confidential, as I am sure it did, when it
was supplied for the purpose of securing Govern
ment loan guarantees. It must also have been kept
confidential by both parties, and obviously, there
fore, must not have been otherwise disclosed, or
available from sources to which the public has
' 498 F.2d 765 (D.C. Cir. 1974).
access. In the final analysis, having read the
report, I am not persuaded that it is exempt from
disclosure on the basis of paragraph 20(1)(c). That
assessment is confirmed in the cross-examinations
of Alan Maislin, George E. Bennett, Jr. and John-
son Smith.
In his cross-examination, Mr. Maislin stated
that references to the federal government's $34
million loan guarantees were made in the Annual
Report of Maislin Industries Ltd., which is a
public document (Question 20); that the closing
down of operations in various locations in North
America was announced in the annual report and
therefore was also public information (Questions
99 to 102); and perhaps most significantly:
190. (Mr. Dearden) Okay, page 16 in the next part, it deals
with the trucking industry, Mr. Maislin.
To short circuit this cross-examination and not walk you
through matters that are raised in this part which goes from
page 16 through to page 27, I would like you to point out to me
any information raised about the trucking industry generally
that would not be known to your competitors in pages 16 to 27?
(Mr. Maislin) No, there is nothing here that is not known. To
what page?
194. (Mr. Dearden) It [page 28] is a brief history of Maislin,
again I have not seen your annual report, but I take it that is
something that would be found in public document?
(Mr. Maislin) That is true.
195. (Mr. Dearden) That goes from pages 28 to 30. If you
could just quickly review those. Now the—what I have got
marked as the next part is page 31, a Profit History of Maislin.
(Mr. Maislin) From the annual report.
196. (Mr. Dearden) That came from the annual report? That
will suffice as far as I am concerned if that is where it came
from Okay?
(Mr. Maislin) Yes.
In her very able submission on behalf of Mais-
lin, counsel placed a good deal of stress upon the
inherent confidentiality of computer systems,
models and software. In cross-examination how
ever, Mr. Johnson Smith, an independent consult
ant retained to assist Maislin in preparing the
report in issue admitted:
Examination by Mrs. Mclsaac:
43 (Mrs. Mclsaac) I have two questions for you Mr. Smith.
This Cosigma letter outlining the computer software pack
age and the models, that was developed. I presume in
1981?
(Mr. Smith) No. I am not ... I could not answer the
question. I know that that is the report date.
44 (Mrs. Mclsaac) But it was—at the time you were writing
the report, was this model in place?
(Mr. Smith) It was on stream.
45 (Mrs. Mclsaac) It was on stream. And I gather that it was
particularly tailored to the needs and peculiarities of the
Maislin group?
(Mr. Smith) Absolutely. In fact, a lot of the information
that I had made available to me emanated from this
model.
46 (Mrs. Mclsaac) Are you familiar with the situation of the
Maislin group today?
(Mr. Smith) Only from what I read in the press.
47 (Mrs. Mclsaac) Can you tell me whether or not this type
of model, given what we, I think all know has happened to
at least portions of the trucking part of the Maislin group,
is still applicable to Maislin?
(Mr. Smith) Well, if Maislin is—they have sold off one of
their—several of their route [sic] by the Receiver, whoever
was appointed to look after it, then it is not germane
because it no longer portrays what the organisation [sic]
now is.
Finally, Mr. Bennett, an independent financial
consultant to the presidents of the company,
conceded that the information he worked on had
been excised from the version intended for release
by the Minister.
Cross-examination by Mrs. Mclsaac:
52 (Mrs. Mclsaac) Turning then to the Exhibit 1 which is a
version of the report which contains only portions of the
original report which the Minister of Industry, Trade and
Commerce has agreed to release to Mr. Dearden's client, is
any of the information which you have compiled and
which your Affidavit refers to, contained in this report as
abridged?
(Mr. Bennett) No, the only thing I see in here is this page
32 which is from public information—it is from the annual
report. There may have been one or two lines added to it.
53 (Mrs. Mclsaac) Okay, so otherwise, the information really
that you are speaking to, in your Affidavit has in fact, [sic]
excised from the report, is that right? From this version of
the report?
(Mr. Bennett) I believe so.
Extensive references were made by all parties on
the confidential aspect of the information and the
manner in which such information should be treat-
ed by the third party. Paragraph 20(1)(b) estab
lishes a twofold test: (1) the information contained
in the record must be confidential in its nature and
(2) this information must be consistently treated in
a confidential manner by the third party (Mais-
lin). There is no disagreement on the fact that
Maislin treated the material in a confidential
manner, thus fulfilling the second requirement, but
the applicant failed to persuade me that by any of
the objective standards to which I have referred
the information was confidential in its nature.
Having determined these issues, I will provide
counsel with the opportunity to make representa
tions as to the precise form of order that should
follow.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.