2020 QCCQ 9028, 2020 QCCQ 9028

9161848 Canada inc. c. Global IT Connect Ltd. 2020 QCCQ 9028 COURT OF QUEBEC (Practice Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No: 500-22-255317-193 DATE: December 17, 2020 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ 9161848 CANADA INC. Plaintiff v. GLOBAL IT CONNECT LTD.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] In May 2019, 9161848 Canada Inc. (‘’ 9161848 ’’) filed a lawsuit against Global IT Connect Ltd (‘’ Global ’’) claiming the payment of $71,901.90, representing the price of computer consulting services which it rendered at Global’s request for the benefit of a third party. [ 2 ] Global denies owing this amount on the grounds that it paid for Plaintiff’s services as per the agreed upon the hourly rate. [ 3 ] On February 8, 2020, Mr.

Reda Agourram, a representative of Global, was examined on discovery by counsel for 9161848 Canada Inc.

During the course of this pretrial examination, the witness was asked to provide the hourly rate charged by Global to the third party and to communicate a copy of the contract between Global and its co-contracting party (‘’ Undertaking U-5 ’’). [ 4 ] Counsel for Global objected to this undertaking on the grounds of relevancy and because it considered that this information was confidential. [ 5 ] The parties have submitted to the Court a Notice of case management in which they ask the Court to adjudicate the objection raised with respect to Undertaking U-5. [ 6 ] The only issue to be decided in this Notice of case management is whether the witness may refrain from answering the question as it pertains to the hourly rate and whether Global’s refusal to communicate the contract is justified on the grounds that the objection raises a “substantial and legitimate interest” within the meaning of

article 228 Code of Civil Procedure (R.S.Q., ch. C-25 .01). [ 7 ] Global argues that the witness should not answer the question and should not be compelled to communicate the contract because the objection raises a substantial and legitimate interest in that

i) it would breach the terms of a confidentiality agreement contained in the contract with the third party if it were forced to answer the undertaking, and ii) non-disclosure is necessary to protect sensitive commercial information. [ 8 ] 9161848 argues that Global’s objection does not raise a ‘’substantial and legitimate interest’’ within the meaning of

article 228 of the C.C.P.

Moreover, even if it does, it argues that since the implied undertaking of confidentiality rule applies to the information sought through U-5 and because it agrees not to file the contract unless it obtains Global’s consent or gives Global the opportunity to seek a confidentiality order, the objection is unfounded. [ 9 ] For the reasons that follow, the Court will dismiss the objection and order Global to communicate the hourly rate and the contract between Global and Cofomo since Global has not proven that the exemption from disclosure is necessary to prevent a serious risk to an important interest and because reasonably alternative measures exist that will prevent the risk it raises.

Analysis and Decision Is Global’s objection to communicate the information responsive to Undertaking U-5 justified on the grounds that the objection raises a substantial and legitimate interest within the meaning of

article 228 Code of Civil Procedure ? [ 10 ] The objection which the Court must adjudicate arises in the following context. [ 11 ] Cofomo Inc., an entity which is not a party to this litigation, entered into an agreement with Canadian National Railway Company (‘’ CNR ’’) to provide it with computer consulting services.

[ 12 ] Cofomo subcontracted this work to Global pursuant to an Agreement entered into on May 24, 2016. [1] [ 13 ] Global itself subcontracted the work to 9161848 pursuant to a subcontract agreement entered into on July 18, 2016 (the ‘’ Sub- Subcontract Agreement ’’). [2] [ 14 ] Under the Sub-Subcontract Agreement, 9161848 agrees to provide computer consulting services to Global, which services shall ultimately be performed for the benefit of CNR.

In return for these services, Global agrees to pay 9161848 an hourly rate based on the number of hours worked by its employees at the request of CNR (clause 5.1). [ 15 ] Appendix A to the Sub-Subcontract Agreement provides that the hourly rate shall be $55. [ 16 ] According to the lawsuit, the dispute between the parties arises from the fact that notwithstanding the hourly rate stipulated in the Sub-Subcontract Agreement, the parties agreed to temporarily reduce the hourly rate to $40 for a period of three months between January 2017 and the end of March 2017. 9161848 invoiced Global at the reduced hourly rate for these three months. [ 17 ] However, 9161848 argues that for the services provided subsequent to the month of March 2017, namely for all services provided between April 2017 and November 2018, Global paid for the services at the reduced hourly rate of $40/hour instead of the contractually agreed upon rate of $55/hour. [ 18 ] Hence, 9161848 claims from Global the difference between the $55/hour rate and the $40/hour reduced rate for services rendered between April 1, 2017, and November 30, 2018. [ 19 ] Global contests the lawsuit and argues that ‘’Plaintiff and Defendant agreed that the hourly rate payable to Plaintiff by Defendant would be $40/hour, which hourly rate was accepted by Defendant.

The increased hourly rate temporarily paid by Defendant to Plaintiff was paid in error and Plaintiff is not entitled to now take advantage to such error to claim a higher hourly rate.’’ [ 20 ] On February 28, 2020, Mr. Reda Agourram, an employee and account manager of Global during the time frame relative to the proceedings, was examined on discovery by counsel for 9161848. [ 21 ] During the course of this examination, the witness is questioned concerning an email sent by Mr. Kongara, a Global employee, to Mr.

Pakki (the 9161848 employee assigned to carry out the computer consulting services for CNR pursuant to the Sub- Subcontract Agreement), in which Mr. Kongara writes: ‘’We have just received a note from the Client [CNR] that your rate has been revised to $40 an hour effective to January 1, 2017, for a temporary period of three months.’’ [3] [ 22 ] In light of this email, counsel for 9161848 makes the following undertaking request to Mr. Agourram: I’m going to ask as an undertaking to have the hourly rate that was charged by Global IT to CN before Mr.

Pakki employ… length of the contract… and I’m going to also ask for a copy of that contract which could be transmitted to me under the confidentiality of Lac d’Amiant (sic), and within undertaking for myself and not to deposit it to the Court record unless we reach an agreement. [4] [ 23 ] Counsel for Global objects to this request on the grounds of relevancy and confidentiality. [ 24 ] To rule on this objection, the Court must apply the rule set forth at

article 228 of the Code of Civil Procedure : 228. Before a pre-trial examination is held, the parties may submit the objections they anticipate to a judge for a decision or for directives as to the conduct of the examination. If the objections raised during the examination pertain to the fact that the person examined cannot be compelled, to fundamental rights or to an issue raising a substantial and legitimate interest, the person may refrain from answering . Such objections must be presented before the court within five days for a decision.

Other objections raised during the examination, including objections based on relevance, do not prevent it from continuing, the witness being required to answer . Such objections are recorded for a decision by the court at trial unless they can be heard by the court for an immediate decision. The judgment on an objection may be rendered orally or in writing. (Underlining added) [ 25 ] The rule set out in this

article is straightforward. A witness cannot refuse to answer a question put to it during an examination on discovery if the objection is based on relevance.

Lack of relevancy may only excuse a party from answering a question or communicating a document if the relevancy is so remote to the questions in issue that it can qualify as an abusive request. [5] [ 26 ] In the instant case, while the relevancy of the rate agreed upon between Global and Cofomo as well as the contract between these entities may appear tenuous in light of the issues of fact and law in dispute as between Global and 9161848, considering that “in the context of an examination on discovery or a disclosure of evidence that takes place while a case is being readied for trial, the concept of relevance is interpreted broadly” [6] and that it is not so blatantly obvious that the information sought through U-5 is not useful and is tantamount to an abusive request, the Court must apply the rule found in paragraph 3 of

article 228 C.C.P. [ 27 ] Therefore, insofar as the relevancy argument raised by Global is concerned, the Court concludes that this cannot form the basis for refusing to comply with U-5. [ 28 ] However, if the objection raised pertains to the fact that the witness cannot be compelled, or relates to fundamental rights or to an issue raising ‘’a substantial and legitimate interest’’, the witness may refrain from answering.

[ 29 ] Global’s second grounds of objection pertains to a ‘’substantial and legitimate interest.’’ [ 30 ] Global argues that it has a substantial and legitimate interest in refraining from answering Undertaking U-5 because the information and documents which are responsive to the undertaking constitute confidential and sensitive business information. It argues that whatever hourly rate it may have negotiated with Cofomo is proprietary and should be protected because of its legitimate business concerns. Further, it adds that if it were to comply with the undertaking, it would be in breach of the confidentiality agreement found in

section 12 of the Agreement between Cofomo and Global. [ 31 ] 9161848 argues that the information which is sought through undertaking U-5 does warrant protection under the ‘’substantial and legitimate interest” test.

Moreover, it adds that Global’s confidentiality concerns are sufficiently addressed given that the documents responsive to the undertaking are protected from the disclosure under the implied undertaking of confidentiality rule and because it agrees not to file at trial the contract unless it obtains Global’s consent or failure which, it affords Global the opportunity to petition the Court to obtain a confidentiality order. [ 32 ] The ‘’substantial and legitimate interest’’ test found in

article 228 C.C.P. , which is also found in

article 12 of the Code , is borrowed from the Supreme Court of Canada decision in Sierra Club of Canada v.

Canada (Minister of Finance) . [7] [ 33 ] In Sierra Club , the Supreme Court adopted the followed test to determine whether a confidentiality order should be issued where a ‘’substantial and legitimate interest’’ is raised by a party as a ground to avoid disclosure of documents: 53 Applying the rights and interests engaged in this case to the analytical framework of Dagenais and subsequent cases discussed above, the test for whether a confidentiality order ought to be granted in a case such as this one should be framed as follows: A confidentiality order under Rule 151 should only be granted when: (

a) such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and (

b) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings. 54 As in Mentuck , I would add that three important elements are subsumed under the first branch of this test.

First, the risk in question must be real and substantial, in that the risk is well grounded in the evidence, and poses a serious threat to the commercial interest in question. 55 In addition, the phrase “important commercial interest” is in need of some clarification. In order to qualify as an “important commercial interest”, the interest in question cannot merely be specific to the party requesting the order; the interest must be one which can be expressed in terms of a public interest in confidentiality.

For example, a private company could not argue simply that the existence of a particular contract should not be made public because to do so would cause the company to lose business, thus harming its commercial interests. However, if, as in this case, exposure of information would cause a breach of a confidentiality agreement, then the commercial interest affected can be characterized more broadly as the general commercial interest of preserving confidential information. Simply put, if there is no general principle at stake, there can be no “important commercial interest” for the purposes of this test.

Or, in the words of Binnie J. in F.N. (Re), [2000] 1 S.C.R. 880, 2000 SCC 35 , at para. 10 , the open court rule only yields “where the public interest in confidentiality outweighs the public interest in openness” (emphasis added). 56 In addition to the above requirement, courts must be cautious in determining what constitutes an “important commercial interest”. It must be remembered that a confidentiality order involves an infringement on freedom of expression.

Although the balancing of the commercial interest with freedom of expression takes place under the second branch of the test, courts must be alive to the fundamental importance of the open court rule. See generally Muldoon J. in Eli Lilly and Co. v.

Novopharm Ltd. (1994), 56 C.P.R. (3d) 437 (F.C.T.D.), at p. 439 . 57 Finally, the phrase “reasonably alternative measures” requires the judge to consider not only whether reasonable alternatives to a confidentiality order are available, but also to restrict the order as much as is reasonably possible while preserving the commercial interest in question. [ 34 ] Moreover, in Gesca ltée v.

Groupe Polygone Éditeurs inc. (Malcom Média inc.) [8] , the Court of Appeal reiterated that the first prong of the two-step Sierra test can only be met if the party objecting to the disclosure proves the following: [94] Comme le souligne mon collègue, il ressort des enseignements de la Cour suprême que le premier critère requiert la démonstration de trois éléments, que je généralise comme suit : - un risque réel et important à l'intérêt en question; en d'autres mots, la preuve doit démontrer l'existence d'une menace grave à l'intérêt en question; - l’intérêt que l'on veut protéger doit être important non seulement pour la

partie qui demande l’ordonnance de confidentialité, mais aussi pour la société ; en d'autres mots, il doit s’agir d’un intérêt qui peut se définir en termes d’intérêt public à la confidentialité; - une absence d'autres options raisonnables , autres que l’ordonnance de confidentialité, pouvant protéger cet intérêt, incluant l'obligation de restreindre l’ordonnance à ce qui est nécessaire à la préservation de cet intérêt. (Underlining in the original text) [ 35 ] The case law applying this test in the context examinations on discovery has consistently held that it must be interpreted

restrictively given the general rule of

article 2857 of the Civil Code of Québec which provides that evidence of any fact relevant to a dispute is admissible and may be produced by any means. [ 36 ] Further, a restrictive

interpretation is also warranted considering that one of the purposes of any trial is to seek and to ascertain the truth. [9] [ 37 ] For the reasons that follow, the Court concludes that Global has not proven that communicating the information and documents responsive to Undertaking U-5 jeopardizes a substantial and legitimate interest. [ 38 ] Firstly, as the Supreme Court stated in Sierra Club , the party seeking immunity from disclosure based on the substantial and legitimate interest test must provide the evidentiary basis required to conclude that relief from disclosure is necessary to prevent a serious risk to an important interest.

As the Supreme Court stated, this risk must be ‘’well-grounded in the evidence.’’ [10] [ 39 ] Global did not adduce any evidence, including any sworn statement or the testimony of its representative, establishing that immunity from the disclosure is necessary to prevent a serious risk to an important interest. Likewise, Mr.

Agourram did not state during his examination in discovery that communicating the information sought in Undertaking U-5 would cause a risk to the company’s important commercial interests. [ 40 ] As a general rule, statements made by counsel alone as to the existence of a serious risk to an important interest are not sufficient to warrant a confidentiality order. [11] [ 41 ] Moreover, the presence of a confidentiality clause in the Agreement between Cofomo and Global does not automatically preclude its communication to 9161848 given the existence of the implied undertaking of confidentiality rule and counsel for Plaintiff’s undertaking to seek Global’s consent, or alternatively, allowing Global the opportunity to obtain a confidentiality order, prior to filing the contract at trial. [12] [ 42 ] Secondly, Global has not established that reasonably alternative measures will not prevent the risk that it raises. [ 43 ] As stated previously, the communication of the documents requested in Undertaking U-5 come within the scope of the implied undertaking of confidentiality rule.

In addition, counsel for 9161848 has agreed not to file the documents it receives into court unless the parties reach an agreement on confidentiality measures or if no such agreement can be reached, that it will notify Global of its intent to file the document as evidence at the trial so that Global can petition the Court to obtain the appropriate confidentiality order. [ 44 ] The existence of these measures constitutes reasonably alternative measures which adequately protect Global’s interests and preserve the principle of public access to the courts.

FOR THESE REASONS, THE COURT: [ 45 ] DISMISSES the objection raised by Global IT Connect Ltd. with respect to Undertaking U-5; [ 46 ] ORDERS Global IT Connect Ltd. to communicate the information and documents responsive to Undertaking U-5 subscribed during the examination of Mr. Reda Agourram on Feb 28, 2020, within 5 days from the date of this judgment; [ 47 ] WITH COSTS. __________________________________ ENRICO FORLINI, J.C.Q.

Mtre Sara Korhani Lapointe Rosenstein Marchand Melançon, s.e.n.c.r.l Plaintiff’s lawyer Mtre Ari Mike Varjabedian Sternthal Montigny Greenberg St-Germain SENCRL Defendant’s lawyer Date of hearing: December 11, 2020