Across Canada, with various provinces revamping Rules of Civil Procedure, the standard is evolving from the traditional test for the requirement to produce a document, being "Does it have a 'semblance of relevance' to a matter at issue in the litigation?" to the new standard of "Does it relate to a matter at issue?" This subtle difference may appear inconsequential, but case law is only now developing that spells out for us exactly how much (or little) production of e-documents is restricted, compared with traditional documents; and at the moment is a bit of a moving target, which Canadian law is grappling to pin down with some degree of certainty.
The Proportionality Principle, developed from the Sedona Principles (U.S.) and the later Sedona Canada Principles (based on and developed following the American version). This standard essentially considers whether e-documents need to be produced based on:
1. The amount at issue in the litigation.
2. The cost/effort of production; including the cost/effort of various scopes of production (wider or narrower).
3. The likely usefulness of the document(s) at issue.
The Supreme Court of Newfoundland & Labrador considered this evolving area of law in a recent case, and essentially found that:
- e-mail production is the modern era's paper-production.
- In an action for significant damages, therefore, the production of emails should be no more restricted than the production of paper-documents would traditionally be, in an analogous case.
- A party demanding production for a particular document need not first demonstrate a "need" for it.
- appropriate search-terms must be implemented to locate emails for production in litigation, and
- a party need not be subject to producing every single email that bears a common term; simply because another party wishes this to be the case.
- the traditional rule that the party producing the documents must bear the cost of so doing is the standard, subject to evidentiary proof it is unduly onerous under the circumstances, the party cannot afford to meet its production obligations, or at the most extreme - impecuniosity.
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GRI Simulations Inc. v. Oceaneering International Inc., 2010 NLTD 85 (April 26, 2010)
Proportionality
[54] Inherent in considering the evidence and argument on this application is appreciating what is at stake in this litigation. The Plaintiff’s claim is for $8,000,000. The Defendants’ counterclaim is for various significant relief including disgorgement of profits. In my view, the fact that Oceaneering has made a counterclaim weighs against them in their attempt to limit their document production.
[55] The principle of proportionality was addressed by both parties. In paragraph 9 of Hollett v. Hatfield, it was recognized
... that a litigant is only entitled to avail of the rules relating to pre-trial applications to the extent that the nature, purpose and complexity of a particular procedure justifies it. Thus, a court could refuse to authorize proceedings that a party would otherwise be entitled, in principle, to take, because the object and nature of the dispute does not justify them.
[56] Likewise, in Air Canada v. Westjet
… It does not seem to me to lie with Air Canada to institute what it says is the largest corporate espionage case ever seen in Canada, couple it with a claim in the order of $200 million and then complain that the production process is going to take more than the usual amount of time and cost more than the usual amount of money.
[57] ... the same point could be made about Oceaneering’s position in this case given the nature of its counterclaim.
[58] The Sedona Principles also recognizes proportionality as a relevant factor in document production.
CONCLUSION
[59] When boiled down, the evidence in support of Oceaneering’s position is Ms. Welshons’ ... time she has spent coordinating the production effort to date ... I am unable to accept it as evidence of inordinate cost and effort to Oceaneering. ... I am not suggesting in-house counsel work is free, but it is to be expected that in-house counsel would engage in work such as overseeing document production in this case. It cannot be forgotten that GRI is also obliged to produce documents to Oceaneering, particularly given Oceaneering’s counterclaim, and has been doing so. GRI’s employees and officials are also logging hours searching, retrieving and vetting their documents for production to Oceaneering.
[60] ...conducting of searches on site appears to me to be expected. There was no evidence of the precise location of the persons whose email is to be searched, although the pleadings and other information imparted during the hearing indicates they are situated in Newfoundland or Texas, which does not appear to me to be a barrier to searching. Indeed, there was no evidence as to how and why on-site searching could be onerous. Neither was there any evidence about difficulties associated with changing passwords which would make searching and retrieval difficult. Lastly, the fact that there may be difficulty in ensuring the completeness of a search is not a reason to not search at all. If the end result is that Oceaneering is unable to swear that all archives have been searched, or either party requests documents it believes exist but which have not been produced, the parties can address those issues then. Mr. Shirt’s final statements about the “inherent difficulty” and “extremely intensive manpower” involved in complying with the Consent Order are unexplained and bold. The court simply cannot accept these sweeping conclusions from an interested party as evidence sufficient to discharge Oceaneering’s burden.
[61] Ms. Welshons’ evidence, including Mr. Shirt’s comments in Exhibit “A”, does not establish that Oceaneering’s efforts to date and those anticipated in future are so onerous in time, effort and cost as to justify relieving Oceaneering of its production obligations. In my view, the costs, time and effort involved are not disproportionate to the nature of this dispute. As indicated earlier in this judgment, GRI’s claim is not small and Oceaneering’s counterclaim is not small. The litigation is complex and appears to be document heavy. Considerable expenditure of resources is to be expected in such cases.
[62] In the result, the evidence does not persuade me that the costs, time or effect involved for Oceaneering to comply with the Consent Order are so onerous that it would be just to relieve Oceaneering of its obligation to produce it, with one exception. The exception concerns Mr. Lawrence’s active email and the search term “Newfoundland”. The word “Newfoundland” is likely to produce a hit on virtually all of Mr. Lawrence’s email and probably explains why there are 10,000 hits. I find this search term too broad to be useful, and that the results would not likely all have a good chance of relating to matters in issue. Accordingly, the search of Mr. Lawrence’s email in regards to paragraph 2 of the Consent Order must be narrowed. I am prepared to hear counsel on how this can be achieved or the matter can be addressed in case management. No evidence of other instances involving an extraordinary number of hits (or documents) was adduced.
[63] All of the other email referenced in the Consent Order is producible.
Oceaneering’s Request that GRI Justify it’s Need for Further Email
[64] ... the email listed in the Consent Order relates to matters in issue in this litigation ... parties are presumed to be entitled to documents relating to matters in issue without providing justification. ... GRI will not be ordered to demonstrate a need for the email.
Oceaneering’s Request That GRI Bear Some Production Costs
[65] The evidence is uncontroverted that Oceaneering is a multimillion dollar international company achieving “record income performance respecting remotely operated vehicles”. Oceaneering did not argue that the cost of document production presented financial hardship.
[66] The cost of producing documents is usually borne by the producing party with the ultimate determination of the issue reserved for decisions on costs at the conclusion of the litigation. I see no reason to depart from this long-standing convention in this case. As indicated, the evidence does not convince me that the production costs are undue or unreasonable in the circumstances. Neither am I convinced that the email sought is irrelevant to the issues or even of a speculative nature. Lastly, I am not persuaded that Oceaneering will be denied justice by the court’s failure to order GRI to share the cost. Oceaneering is far from impecunious or of such limited means that it cannot afford to bear the email production costs in the usual manner. Accordingly, there will be no order that GRI bear any future costs of producing the email referenced in the Consent Order.
DISPOSITION
[67] Oceaneering’s application is dismissed.
[68] GRI shall have its party and party costs on this application in any event of the cause.
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Lois R. Hoegg
Justice
http://www.canlii.org/en/nl/nlsctd/doc/2010/2010nltd85/2010nltd85.html
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