Friday, January 13, 2017

Discovery of a Non-Party

Discovery of a Non-Party

Discovery of a non-party is fairly common in the Uniter States.  So under the U.S. Federal Rules of Civil Procedure, Rule 30: 
A party may, by oral questions, depose any person, including a party, without leave of court ... .
In Ontario, of course, examination for dsicovery of non-parties is limited as recently described in Mancinelli v Royal Bank, 2017 ONSC 87.
Broadly stated, an order for discovery of a non-party is an exceptional order; such an order should be made only in exceptional circumstances: Morse Shoe (Canada) Ltd. v. Zellers Inc., 1997 CanLII 1573 (ON CA), [1997] O.J. No. 1524 (C.A.) at para. 19.  Non-parties are not generally subject to the discovery: Reichmann v. Vered, [1998] O.J. No. 3751 (C.A.) at para. 8; Kerr v. McLeod, [2002] O.J. No. 788  (Div. Ct.) at para. 2.  That said, when a non-party has information not otherwise available and fairness requires it, discovery can be available:  Rule 31.10.
The rule for the production of documents from a non-party requires that the information sought is relevant to a "material issue" in the action. This test of relevancy is higher than the "any matter in issue" standard for obtaining production from a party to the action: Lowe v. Motolanez (1996), 1996 CanLII 37 (ON CA), 30 O.R. (3d) 408 (C.A.) at p. 413; Tribax Management Ltd. v. Laswind Investment Ltd., [2006] O.J. No. 3439 (S.C.J.) at para. 5.
Disclosure and production of a document from a non-party will be provided as a matter of fairness and necessity. The court determines whether it would be unfair to require the moving party to proceed to trial without a document in the possession of a non-party, and balances that against the interests of the non-party, which include concerns about privacy, inconvenience, and exposure to liability: Lowe v. Motolanez, supra; Tetefsky v. General Motors Corp., supra at paras. 41-42; Fairview Donut Inc. v. TDL Group Corp., 2011 ONSC 247 (CanLII) at paras. 10-11. Although production can be ordered from a non-party, it is not routinely sought and the threshold for granting it is high: Olendzki v. W.A. Baker Trucking Ltd., [2006] O.J. No. 256 (S.C.J.).
In determining whether to allow dsicovery of a non-party the Court will consider (Mancinelli, supra):
"[47]            In making the determination whether to permit third party discovery of documents, the court may consider the following factors: (1) the importance of the document to the issues in the litigation; (2) whether production at the discovery stage as opposed to production at trial is necessary to avoid unfairness to the moving party; (3) whether the examination of the opposing party with respect to the issues to which the documents are relevant would be adequate to obtain the information in the document; (4) the availability of the document or its information from another source that is accessible to the moving party; (5) the relationship of the non-party from whom production is sought to the litigation and the parties to the litigation; and (6) the position of the non-party with respect to production: Morse Shoe (Canada) Ltd. v. Zellers Inc., supra; Ontario (Attorney General) v. Ballard Estate (1994), 26 O.R. (3d) 189 (C.A.); McGillivary v. Toronto Police Services Board, 2014 ONSC 865 (CanLII), 2014 ONSC 865 (Master); Durling v. Sunrise Propane Energy Group Inc., [2008] O.J. No. 5031 (Master); Chiarella v. Simon, [2007] O.J. No. 8 (S.C.J.); Colville-Reeves v. Gray, [2003] O.J. No. 1304 (Master); Boucher (Litigation Guardian of) v. Charles, 2013 ONSC 3120 (CanLII), 2013 ONSC 3120 (Master).

[48]           The test under rule 31.10 for the examination of a non-party involves four components, all of which must be established for there to be an examination of a non-party; namely: (1) there is reason to believe that the non-party has information relevant to a material issue; (2) the examining party has been unable to obtain the information from the examined party or from the non-party; (3) it would be unfair to the examining party to proceed to trial without the examination of the non-party; and (4) the examination will not unduly delay the commencement of the trial of the action, entail unreasonable expense for other parties, or result in unfairness to the person the moving party seeks to examine: Rothwell v. Raes, [1986] O.J. No. 2495 (Div. Ct.); Famous Players Development Corp. v. Central Capital Corp. (1991), 1991 CanLII 7202 (ON SC), 6 O.R. (3d) 765 (Div. Ct.); Din v. Melady, 2010 ONSC 4865 (CanLII), 2010 ONSC 4865 (Master); McDermid Paper Converters Ltd. v. McDermid, 2010 ONSC 5404 (CanLII); Manga Hotels (Toronto) Inc. v. GE Canada Equipment Financing G.P., 2014 ONSC 2699 (CanLII). To satisfy the test under rule 31.10, the party requesting an order to examine a non-party for discovery must show that the party who was examined for discovery refused or constructively refused to provide the information sought from the non-party: Famous Players Development Corp. v. Central Capital Corp., supra."

As can be seen discovery of non-parties remains limited in Ontario

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