Pre-Action discovery

Discovery prior to an action is rarely allowed in Ontario.  That said, Norwich orders for such discovery can be obtained in rare circumstances.  Today's Court of Appeal decision in GEA Group AG v. Ventra Group Co., 2009 ONCA 619 outlines when those orders can be obtained:

 

 

(1)              Norwich Relief

[40]          I begin with consideration of the origins and nature of Norwich relief and the test for the granting of such relief in Ontario. 

[41]          The remedy of pre-action discovery derives from the ancient bill of discovery in equity.  Contemporary consideration of this type of equitable relief began with the 1974 decision of the House of Lords in Norwich Pharmacal, a case of suspected patent infringement.  Norwich Pharmacal holds that, in certain circumstances, an action for discovery may be allowed against an "involved" third party who has information that the claimant alleges would allow it to identify a wrongdoer, so as to enable the claimant to bring an action against the wrongdoer where the claimant would otherwise not be able to do so.  In a passage frequently quoted in subsequent authorities, Lord Reid described the basic principle at p. 175:

[I]f through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers.  I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did.  It may be that if this causes him expense the person seeking the information ought to reimburse him.  But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.

[42]          In his concurring speech in Norwich Pharmacal at p. 199, Lord Cross of Chelsea rejected the suggestion that the recognition of an action for discovery to permit disclosure of the names and addresses of alleged wrongdoers would open the door to meritless "fishing requests" by prospective plaintiffs who sought to collect evidence or information from persons who had no relevant connection with the person to be sued or the events at issue.  In so doing, he also identified the following factors as relevant to the determination of whether pre-action discovery of a third party should be allowed in the exercise of the court's discretion:

(i)     the strength of the applicant's case against the unknown alleged wrongdoer;

(ii)  the relationship between the alleged wrongdoer and the respondent (the person from whom discovery is sought);

(iii)  whether the information could be obtained from another source; and

(iv)    whether the provision of the information "would put the respondent to trouble which could not be compensated by the payment of all expenses by the applicant".

See also, to substantially the same effect, the speech of Lord Kilbrandon in Norwich Pharmacal, at p. 205. 

[43]          In Norwich Pharmacal, pre-action discovery was sought for a narrow purpose – to identify suspected wrongdoers where it was known that a wrong had occurred, in order to permit the injured parties to sue for redress.  To achieve this focused objective, discovery was allowed against an "innocent" third party against whom the appellants had no direct cause of action.

[44]          However, following Norwich Pharmacal, the reach of the equitable action for discovery in England was significantly expanded.  In subsequent cases, pre-action discovery was granted where a cause of action against the respondent from whom discovery was sought was asserted on the basis of the respondent's own alleged wrongdoing (see British Steel Corpn. v. Granada Television Ltd., [1981] A.C. 1096 (H.L.)), as well as where the object of the relief was to permit the tracing and freezing of assets (see Bankers Trust Co. v. Shapira, [1980] 3 All E.R. 353 (C.A.); A. v. C., [1980] 2 All E.R. 347 (Q.B.)).  In addition, in P. v. T., [1997] 4 All E.R. 200 (Ch D), Norwich relief was granted to permit an applicant to determine if, in fact, he had a cause of action against a suspected wrongdoer. 

[45]          Moreover, in Ashworth Hospital Authority v. MGN Ltd., [2002] 4 All E.R. 193 (H.L.), it was held at para. 44 that the " Norwich jurisdiction" was not linked "to any requirement that the information should be available to the individual who had been wronged only for the purpose of enabling him to vindicate that wrong by bringing proceedings".  In other words, the court in Ashworth accepted that a Norwich order could be obtained in the absence of a settled intention to sue the alleged wrongdoer or the person from whom discovery is sought.  See also Norwich Pharmacal, at p. 175, per Lord Reid.  The rationale for this expansive approach to Norwich relief was explained by Lord Woolf C.J. in Ashworth at para. 57:

New situations are inevitably going to arise where it will be appropriate for the jurisdiction to be exercised where it has not been exercised previously.  The limits which applied to its use in its infancy should not be allowed to stultify its use now that it has become a valuable and mature remedy.

[46]          The availability of pre-action discovery has also been codified in the applicable rules of court in England .  For example, Rule 31.16 of the Civil Procedure Rules 1998 (U.K.), SI 1998 No. 3132 (L. 17), provides that a court may order disclosure against a respondent who is "likely to be a party to subsequent proceedings" under certain circumstances in order to: "(i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs".    Further, under Rule 31.17, an order for disclosure by a person who is not a party to proceedings may be made by a court where: "(a) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (b) disclosure is necessary in order to dispose fairly of the claim or to save costs".  Finally, Rule 31.18 provides that Rules 31.16 and 31.17 "do not limit any other power which the court may have to order – (a) disclosure before proceedings have started; and (b) disclosure against a person who is not a party to proceedings".

[47]          In contrast, as in most provinces in Canada , the Ontario Rules of Civil Procedure make no provision for equitable relief in the nature of a Norwich order.^[1]  Moreover, Norwich orders have been considered in only a limited number of cases in Canada to date.

[48]          In Glaxo Wellcome plc v. Minister of National Revenue, [1998] 4 F.C. 439 (C.A.), leave to appeal refused [1998] S.C.C.A. No. 422, on facts similar to those in Norwich Pharmacal, a pharmaceutical patent holder applied to the Minister of National Revenue under the Customs Act, R.S.C. 1985, c. 1, (2nd Supp.) for disclosure of the names of various drug importers who were said to have infringed the applicant's intellectual property rights.  As in Norwich Pharmacal, disclosure of the requested information was denied on the ground of confidentiality.  The drug company then applied to the Federal Court of Canada for judicial review of that denial and for an order permitting it to examine the Minister on discovery to obtain the importers' identities.  Both applications were dismissed.  On appeal to the Federal Court of Appeal, the appeal from the dismissal of the judicial review application was dismissed but the appeal from the dismissal of the application for an equitable bill of discovery was allowed.

[49]          Following a detailed review of the decision in Norwich Pharmacal, Stone J.A. held at p. 461 that there are two threshold requirements for obtaining the discretionary remedy of an equitable bill of discovery: (i) the applicant must have a bona fide claim against the alleged wrongdoers; and (ii) the applicant must share some sort of relationship with the respondents.  Justice Stone explained that the first requirement is intended to ensure "that actions for a bill of discovery are not brought frivolously or without any justification", while the second requirement reflects the principle that "a bill of discovery may not be issued against a mere witness or disinterested bystander to the alleged misconduct".  Justice Stone then identified two additional requirements for granting a bill of discovery: (iii) the person from whom discovery is sought must be the only practicable source of information available to the applicant; and (iv) the public interests both in favour and against disclosure must be taken into account.

[50]          A similar approach to Norwich orders has been adopted in Alberta.  In Alberta (Treasury Branches) v. Leahy (2000), 270 A.R. 1 (Q.B.), aff'd (2002), 303 A.R. 63 (C.A.), leave to appeal refused [2002] S.C.C.A. No. 235, after an extensive review of the relevant authorities in England and Canada, Mason J. described the variety of situations in which Norwich relief has been granted by the courts (at para. 106):

(i)                where the information sought is necessary to identify wrongdoers;

(ii)              to find and preserve evidence that may substantiate or support an action against either known or unknown wrongdoers, or even determine whether an action exists; and

(iii)           to trace and preserve assets.

[51]          Justice Mason then offered the following formulation of the test for a Norwich order (at para. 106):

The court will consider the following factors on an application for Norwich relief:

(i)                Whether the applicant has provided evidence sufficient to raise a valid, bona fide or reasonable claim;

(ii)              Whether the applicant has established a relationship with the third party from whom the information is sought such that it establishes that the third party is somehow involved in the acts complained of;

(iii)           Whether the third party is the only practicable source of the information available;

(iv)             Whether the third party can be indemnified for costs to which the third party may be exposed because of the disclosure, some [authorities] refer to the associated expenses of complying with the orders, while others speak of damages; and

(v)               Whether the interests of justice favour the obtaining of the disclosure.

[52]          In Ontario, this court has held that the equitable action for discovery lies in this jurisdiction and that it co-exists with the Rules of Civil Procedure: Straka v. Humber River Regional Hospital (2000), 51 O.R. (3d) 1, at paras. 27 and 32.  In Straka, Morden A.C.J.O. observed at para. 36: "The real question with respect to an action for discovery is: in what circumstances does it properly lie?  We are concerned with an equitable remedy and, accordingly, the exercise of a discretion is involved."  Justice Morden went on to accept Stone J.A.'s analysis in Glaxo of the prerequisites to the obtaining of an order for pre-action discovery.^[2] 

[53]          The holding in Straka that the equitable remedy of a bill of discovery is preserved in Ontario law and that it operates in concert with the Rules of Civil Procedure was reaffirmed by this court in Meuwissen (Litigation Guardian of) v. Strathroy Middlesex General Hospital (2006), 40 C.P.C. (6th) 6, at paras. 3-4 and 9.  The remedy was also recently considered in Isofoton S.A. v. Toronto Dominion Bank (2007), 85 O.R. (3d) 780 (Sup. Ct.), in which the court expressly adopted the Leahy test for the granting of Norwich relief.

[54]          Thus, many of the general principles applicable in Ontario to the granting of Norwich relief are well developed.  That said, the following observation by Morden A.C.J.O. in Straka at para. 51 remains apposite: "[t]he nature and scope of the Norwich Pharmacal principle is far from settled."