T-787-88
Her Majesty the Queen (Plaintiff)
v.
ICHI Canada Ltd. (Defendant)
INDEXED AS: CANADA V. ICHI CANADA LTD. (T.D.)
Trial Division, Reed J.—Vancouver, September 16
and 19, 1991.
Practice — Discovery — Examination for discovery —
B.C.C.A. decision holding no implied undertaking to use infor
mation obtained at discovery only for purposes of that litiga
tion, not followed — Implied undertaking restricting use of
information applies to Federal Court discovery process —
Unlike situation in U.S.A., discovery materials not part of pub
lic record until filed with Court — Implied undertaking reduc
ing number of pre-trial motions — Not leading to excessive liti
gation — Case law of other jurisdictions (U.K, Saskatchewan,
Ontario, Alberta and New Brunswick) where implied undertak
ing existing, persuasive — Implied undertaking neither
restricting use of information subsequently made part of public
record nor affecting use of information obtained on discovery
which could have been obtained from other sources — Party
may apply for release from implied undertakings in collateral
litigation.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Rules, C.R.C., c. 663, R. 5.
CASES JUDICIALLY CONSIDERED
NOT FOLLOWED:
Kyuquot Logging Ltd. v. British Columbia Forest Prod
ucts Ltd. et al. (1986), 30 D.L.R. (4th) 65; [1986] 5
W.W.R. 481; 5 B.C.L.R. (2d) 1; 15 C.P.C. (2d) 52; 12
C.P.R. (3d) 347 (C.A.); Harman v. Secretary of State for
the Home Department, [1983] 1 A.C. 280; [1982] 1 All
E.R. 532 (H.L.).
CONSIDERED:
Williams v. Prince of Wales' Life, & Company (1857), 23
Beay. 338; 53 E.R. 133 (Rolls Ct.); Reynolds v. Godlee
(1858), 4 K. & J. 88; 70 E.R. 37 (Vice-Chancellor's Ct.);
Tagg v. South Devon Railway Company (1849), 12 Beay.
151; 50 E.R. 1017 (Rolls Ct.).
REFERRED TO:
Canada (Director of Investigation and Research) v.
Southam Inc. (1991), 36 C.P.R. (3d) 22 (Comp. Trib.);
Alterskye v. Scott, [1948] 1 All E.R. 469 (Ch. D.); Laxton
Hldg. Ltd v. Madill, [1987] 3 W.W.R. 570; (1987), 56
Sask. R. 152; 26 C.C.L.I. 121; 18 C.P.C. (2d) 117 (C.A.);
Anderson v. Anderson et al. (1979), 26 O.R. (2d) 769; 105
D.L.R. (3d) 341; 14 C.P.C. 87; 12 R.F.L. (2d) 353 (H.C.);
Lac Minerals Ltd v. New Cinch Uranium Ltd. et al.
(1985), 50 O.R. (2d) 260; 17 D.L.R. (4th) 745; 48 C.P.C.
199 (H.C.); Reichmann et al. v. Toronto Life Publishing
Co. et al. (1988), 28 C.P.C. (2d) 11 (Ont. H.C.); National
Gypsum Co. v. Dorrell (1989), 68 O.R. (2d) 689; 34
C.P.C. (2d) 1; 25 C.P.R. (3d) 15 (H.C.); Miller, (Ed) Sales
& Rentals Ltd. v. Caterpillar Tractor Co. (1986), 43 Alta.
L.R. (2d) 299 (Q.B.); Wirth Ltd. v. Acadia Pipe & Supply
Corp. et al. (1991), 113 A.R. 298; 79 Alta. L.R. (2d) 345
(Q.B.); Blake v. Hudson's Bay Co., [1988] 1 W.W.R. 176;
(1987), 22 C.P.C. (2d) 95 (Man. Q.B.); Rocca Enterprises
Ltd. et al. v. University Press of New Brunswick Ltd. and
Crowther (1989), 103 N.B.R. (2d) 224; 259 A.P.R. 224
(Q.B.); Lubrizol Corp. v. Imperial Oil lid, [1991] 1 F.C.
325; (1990), 33 C.P.R. (3d) 49 (T.D.); Smith, Kline &
French Laboratories Ltd v. Canada (Attorney General),
[1989] 3 F.C. 540; (1989), 24 C.P.R. (3d) 484; [1989] 2
C.T.C. 63; 89 DTC 5205 (T.D.); Richardson v. Hastings
(1844), 7 Beay. 354; 49 E.R. 1102 (Rolls Ct.).
AUTHORS CITED
Bray, E. The Principles and Practice of Discovery,
London: Reeves & Turner, 1885.
Eagles, Ian "Disclosure of Material Obtained on Discov
ery" (1984), 47 Mod L. Rev. 284.
Hare, T. A Treatise on the Discovery of Evidence, 2nd ed.,
London: Stevens & Sons, 1877.
Love, P. H. "Constructing a Public Right of Access to
Pretrial Proceedings: How Sound is the Structure?"
(1988), 66 Wash. U.L.Q. 745.
Seton, Sir H. W. Forms of Judgments and Orders in the
High Court of Justice and Court of Appeal, 7th ed. by
A. R. Ingpen, F. T. Bloxman and H. G. Garrett,
London: Stevens & Sons, 1912.
Williston, W. B. and R. J. Rolls The Law of Civil Proce
dure, Vol. 2, Toronto: Butterworths, 1970.
COUNSEL:
Mary Jane Dodge, Q.C. for plaintiff.
Lana K. L. Li for defendant.
SOLICITORS:
Deputy Attorney General of Canada for plain
tiff.
Douglas, Symes & Brissenden, Vancouver, for
defendant.
The following are the reasons for order rendered in
English by:
REED J.: The defendant brings a motion to require
the plaintiff to produce an officer to be examined for
discovery. The dispute between the parties arises out
of uncertainty as to the status of information obtained
as a result of an examination for discovery which
takes place pursuant to the Federal Court Rules
[C.R.C., c. 663].
The plaintiff put forward an officer for discovery
but sought an undertaking from counsel for the
defendant that information obtained thereby would
not be used for any purpose extraneous to the pro
ceeding for which it was obtained. Counsel for the
defendant refused to give such an undertaking. There
is other litigation allegedly in progress to which such
information might be relevant.
The issue raised is whether discovery proceedings
undertaken pursuant to the Federal Court Rules and
practice are governed by the British Columbia Court
of Appeal decision in Kyuquot Logging Ltd. v. British
Columbia Forest Products Ltd. et al. (1986), 30
D.L.R. (4th) 65) The Kyuquot case held that there
was no implied undertaking requiring parties to use
information obtained from the opposite party on dis
covery, only for the purposes of that litigation. In the
Kyuquot case it was decided that all such information
automatically became public unless specific orders or
undertakings had previously been given to the con
trary.
Position Generally Re: Use of Discovery Materials
The position taken in the Kyuquot decision differs
from that which exists elsewhere. In the United King-
I This same issue was dealt with for the purpose of the Com
petition Tribunal Rules in Canada (Director of Investigation
and Research) v. Southam Inc. (1991), 36 C.P.R. (3d) 22
Comp. Trib.), Reasons and Order Regarding Use of Material
Obtained on Discovery and Criterion for Issuing Confidentia
lity (Protective) Orders.
dom there is an implied undertaking, which accompa
nies disclosure on discovery, requiring the party who
obtains documents or information not to use them for
any purpose collateral or ulterior to the litigation in
issue: see particularly Alterskye v. Scott, [1948] 1 All
E.R. 469 (Ch. D.). The Saskatchewan Court of
Appeal concluded in 1987 that the practice in that
province was the same as in England: Laxton Hldg.
Ltd. v. Madill, [1987] 3 W.W.R. 570 (Sask. C.A.). In
Ontario, various first instance cases reveal that such
an implied undertaking operates in that province:
Anderson v. Anderson et al. (1979), 26 O.R. (2d) 769
(H.C.); Lac Minerals Ltd. v. New Cinch Uranium Ltd.
et al. (1985), 50 O.R. (2d) 260 (H.C.); Reichmann et
al. v. Toronto Life Publishing Co. et al. (1988), 28
C.P.C. (2d) 11 (Ont. H.C.); National Gypsum Co. v.
Dorrell (1989), 68 O.R. (2d) 689 (H.C.). 2
In Alberta, Manitoba, and New Brunswick, the
courts, at least at the trial level, apply the principle of
an implied undertaking: Miller, (Ed) Sales & Rentals
Ltd. v. Caterpillar Tractor Co. (1986), 43 Alta. L.R.
(2d) 299 (Q.B.); Wirth Ltd. v. Acadia Pipe & Supply
Corp. et al. (1991), 113 A.R. 298 (Q.B.); Blake v.
Hudson's Bay Co., [1988] 1 W.W.R. 176 (Man.
Q.B.); Rocca Enterprises Ltd. et al. v. University
Press of New Brunswick Ltd. and Crowther (1989),
103 N.B.R. (2d) 224 (Q.B.). The existence of such an
implied undertaking was recently recognized in a
decision of the Associate Senior Prothonotary of this
Court: Lubrizol Corp. v. Imperial Oil Ltd., [1991] 1
F.C. 325 (T.D.). See also Smith, Kline & French Lab
oratories Ltd. v. Canada (Attorney General), [1989]
3 F.C. 540 (T.D.), at pages 555-556, for discussion of
the issue.
British Columbia Position and the Kyuquot Decision
In the light of this jurisprudence it is necessary to
consider the Kuyquot decision more closely. In that
case, the plaintiff in an action against British Colum-
bia Forest Products Limited ("BCFP") and the Crown
wished to disclose documents and other information
that it had obtained through its discovery of BCFP to
the plaintiffs in another action arising out of the same
2 Textbook, W. B. Wiilliston and R. J. Rolls, The Law of
Civil Procedure, vol. 2 (Toronto: Butterworths, 1970), at p.
941 also describes the implied undertaking.
facts. These other plaintiffs were suing only the
Crown, having settled with BCFP, and therefore were
not independently entitled to discovery of BCFP.
McLachlin J.A. (as she then was), writing for the
majority, first examined the state of English law as of
1858 (the date of reception in British Columbia). She
held that in 1858 there was in England no implied
undertaking to use documents produced on discovery
only in the action in which they were produced. She
also surveyed later developments in the law of that
country which led to the modern position with
respect to the implied undertaking, which she recog
nized clearly exists in England today. She concluded
[at page 83] that:
... the idea of an implied undertaking to the court enforceable
by contempt did not emerge until Alderskye [sic] and was not
generally accepted until Harman. Until then, the obligation on
a party in possession of discovery documents was enforced by
express undertakings or injunctions.
The position in British Columbia was held to resem
ble the pre-Alterskye position in England.
The second main impetus for the decision appears
to have been a policy consideration: that a blanket
rule against using information obtained on discovery
for purposes outside the case for which it was
obtained would lead to excessive litigation.
Jurisprudence in the Nominate Reports
With respect to the British Columbia Court of
Appeal's summary of the English law prior to Alter-
skye, it is based, at least in part, on certain early deci
sions contained in the nominate reports. 3 The nomi
nate reports often give rise to conflicting
3 The cases referred to at pp. 16-17 are: Williams v. Prince
of Wales' Life, & Company (1857), 23 Beay. 338; 53 E.R. 133
(Rolls Ct.); Reynolds v. Godlee (1858), 4 K. & J. 88; 70 E.R.
(Continued on next page)
interpretations because they are not official reports
but merely notes taken down in court and compiled
by the named reporter. With respect, the conclusion
which I would draw from these early cases is differ
ent from that which was drawn in the Kyuquot deci
sion. For example, the decision in Williams v. Prince
of Wales' Life, & Company (1857), 23 Beay. 338; 53
E.R. 133 (Rolls Ct.) was characterized as establishing
the requirement to obtain express court orders or
undertakings to restrict the use of discovery material
to the instant case. I do not interpret the decision as
establishing that proposition.
In the Williams case the defendants, before prepar
ing a schedule of the documents in their possession
(an affidavit of documents), undertook to give the
plaintiff access to the documents for inspection. The
documents were voluminous. The inspection did not
go smoothly. The plaintiff applied to the Court for an
order requiring production. The plaintiff alleged that
the defendants would not grant access to anyone but
the plaintiff personally and only for one hour per day.
The defendants alleged that the plaintiff's solicitor's
clerk was rude and offensive and that the plaintiff
was misusing the documents by making them public.
The Court indicated that both parties were at fault. It
was held that the plaintiff and his agents were to be
allowed access at all reasonable times and that in so
far as the plaintiff's conduct was concerned: 4
... it is not the right of a Plaintiff, who has obtained access to
the Defendants' papers, to make them public. The Court has
granted injunctions to prevent it, and I myself have done so, to
prevent a Plaintiff, a merchant, from making public informa
tion obtained under the order for production.
I shall only make the order in this case, upon the Plaintiff's
undertaking not to make public or communicate to any stran
ger to the suit the contents of such documents, and not to make
them public in any way.
(Continued from previous page)
37 (Vice-Chancellor's Ct.); Tagg v. South Devon Railway
Company (1849), 12 Beay. 151; 50 E.R. 1017 (Rolls Ct.);
Richardson v. Hastings (1844), 7 Beay. 354; 49 E.R. 1102
(Rolls Ct.).
4 (1857), 23 Beay. 338, at p. 340.
I do not read the decision in the Williams case as
standing for the proposition that an express order or
undertaking must be obtained in order to have use of
the documents restricted. Rather implicit in the deci
sion is recognition that an obligation exists not to use
discovery documents for purposes extraneous to the
action even in the absence of an express court order
so requiring. The fact that the Judge in that case
made an express undertaking a condition of the order
he finally gave would seem to have been for `added
insurance' rather than as a result of an absolute need
to do so.
With respect to Reynolds v. Godlee, 5 a case heavily
relied upon in the Kyuquot decision, 6 it must be noted
that whatever may have been said about undertakings
with respect to discovery documents, it was all dicta.
That decision relates to a solicitor-client privilege and
it was on that basis that the plaintiff was allowed in
the end to refuse to produce the document. While the
plaintiff had originally resisted production, not on the
basis of solicitor-client privilege, but because he had
obtained the document from another defendant by a
motion, that is not the basis on which a decision was
finally made. Also, in so far as this dicta is con
cerned, I read the decision as saying no more than
that one cannot refuse to produce a document
because it has been obtained from another in confi
dence and if the document has been obtained pursu
ant to an order for discovery the court is not pre
vented from requiring its disclosure to others.
With respect to the decision in Tagg v. South
Devon Railway Company 7 it is not surprising that the
Court of Chancery at that time refused to order that
documents produced on discovery could not be used
in an action at law. Prior to 1854, the only way dis
covery could be obtained in an action at law was by
bringing a bill for discovery in Chancery.
5 Supra, note 3.
6 And in the article by Ian Eagles, "Disclosure of Material
Obtained on Discovery" (1984), 47 Mod. L.Rev. 284, at par.
286n which is referred to in the Kyuquot decision.
7 Supra, note 3.
Other Considerations
With respect to the references to the position in the
United States which is referred to in Kyuquot it
should be noted that the Federal Rules of Procedure
in the United States require that many of the docu
ments exchanged by the parties during the discovery
process prior to trial be filed with the court; the docu
ments thereby become part of the public record. This
is undoubtedly one of the reasons why discovery is
not subject to implied restricted use undertakings in
the United States. 8 Transcripts of discovery proceed
ings are not automatically filed as part of the Federal
Court's public record. They are only filed when
introduced by the parties at trial, or when portions
thereof are attached to affidavits for the purpose of
certain pre-trial motions. Until made part of the pub
lic record the discovery process conducted pursuant
to the Federal Court Rules is a non-public proceed
ing.
With respect to the argument that a general rule
preventing use of documents and information
obtained on discovery for purposes outside the con
text of the litigation will lead to excessive litigation,
the opposite view is also a credible one. In fact, the
general rule seems to have been operating in various
jurisdictions for many years without much litigation
arising therefrom. This is evident from the lack of
reported jurisprudence in the United Kingdom
between the early nominate reports and the Alterskye
decision of 1948. While the existence of an implied
undertaking is noted in a number of older texts such
as Hare on Discovery, 9 Bray on Discovery 10 and
Seton's Judgments and Orders» there is little else
referring to the practice in those early years. One can
conclude that there are not many reported decisions
on this subject because the principle of an implied
8 See P. H. Love, "Constructing a Public Right of Access to
Pretrial Proceedings: How Sound is the Structure?" (1988) 66
Wash. U.L.Q. 745, at p. 763.
9 T. Hare, A Treatise on the Discovery of Evidence, 2nd ed.
by S. Hare (London: Stevens & Sons, 1877), at p. 268n.
10 E. Bray, The Principles and Practice of Discovery (Lon-
don: Reeves & Turner, 1885), at p. 238.
11 Sir H. W. Seton, Forms of Judgments and Orders in the
High Court of Justice and Court of Appeal, 7th ed. by A. R.
Ingpen, F. T. Bloxam and H. G. Garrett (London: Stevens &
Sons, 1912), at p. 76.
undertaking was clearly established, well understood
and operated smoothly.
Reference should be made to one other case:
Harman v. Secretary of State for the Home Depart
ment, [1983] 1 A.C. 280; [1982] 1 All E.R. 532
(H.L.). Reference must be made to this case because
it is a rather strange decision and it was referred to in
the Kyuquot decision. The Harman decision was con
cerned with determining when an undertaking
respecting restricted use expired. The decision refers
to the existence of implied undertakings although the
undertaking, in fact, in that case was express. The
decision is strange because it held that counsel's dis
closure to a journalist of a document even after the
document had been read in open court constituted a
breach of the undertaking and was therefore con
tempt of court. It is reasonable to conclude that the
courts of this country would be reluctant to follow the
Harman decision, in the absence of a Supreme Court
ruling which adopted it as correct. In fact, the English
rules of court [Rules of the Supreme Court 1965]
were amended [S.I. 1987, No. 1423] in 1987 (post-
Harman) to explicitly provide that any undertaking
with respect to the use of a document obtained on
discovery expires upon the reading of or reference to
the document in open court. 12
Federal Court Proceedings
What then of the position with respect to informa
tion obtained on discovery from the opposing side in
a Federal Court proceeding?
In my view, an implied undertaking restricting the
use of information (transcripts and documents)
obtained on discovery applies to the Federal Court
discovery process. As has already been noted, discov
ery materials do not become part of the public record
12 0. 24, r. 14A:
14A. Any undertaking, whether express or implied, not to
use a document for any purposes other than those of the pro
ceedings in which it is disclosed shall cease to apply to such
document after it has been read to or by the Court, or refer
red to, in open Court, unless the Court for special reasons
has otherwise ordered on the application of a party or of the
person to whom the document belongs.
in this Court until they are filed with the Court. Sec
ondly, the operation of an implied undertaking likely
reduces the number of pre-trial motions which might
otherwise be brought. Thirdly, the jurisprudence in
other jurisdictions, particularly the provinces, other
than British Columbia, and that in the United King
dom is persuasive.
Rule 5 of the Federal Court Rules provides that
where a matter arises which is not dealt with by the
rules, the Court may give directions to adopt the
practice and procedure in force for similar proceed
ings in the courts of the province to which the sub-
ject—matter most particularly relates (the gap rule).
Counsel have not sought such directions in this case
and indeed , if they had I would not have been inclined
to adopt the British Columbia jurisprudence. I do not
think a gap exists to which Rule 5 might apply and I
assume counsel did not think so either since they did
not raise it.
An order will therefore issue requiring the plaintiff
to produce a representative for discovery. The defen
dant will know from the text of these reasons that an
implied undertaking automatically arises so that
information obtained on discovery is to be used only
for the purposes of the litigation for which it is
obtained. This does not, of course, restrict the use of
any information which subsequently is made part of
the public record. Nor does it affect the use of infor
mation which while obtained on discovery may also
have been obtained from some other source. An
implied undertaking cannot operate to pull under its
umbrella documents and information obtained from
sources outside the discovery process merely because
they were also obtained on discovery. In addition, the
implied undertaking does not prevent a party from
applying, in the context of collateral litigation, for
release from the implied undertaking, so that infor
mation obtained on discovery might be used in that
litigation. This, however, is a matter to be determined
in the context of that proceeding and not in this pro
ceeding.
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.