2012 QCCA 1477, 2012 QCCA 1477

Imperial Tobacco Canada Ltd. c. Létourneau 2012 QCCA 1477 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-022769-129 (500-06-000070-983) (500-06-000076-980) DATE: AUGUST 21, 2012 PRESIDING: THE HONOURABLE ALLAN R. HILTON, J.A. IMPERIAL TOBACCO CANADA LTD. PETITIONER – Defendant / Plaintif in warranty v.

CÉCILIA LÉTOURNEAU CONSEIL QUÉBÉCOIS SUR LE TABAC ET LA SANTÉ JEAN-YVES BLAIS RESPONDENTS – Plaintiffs and ATTORNEY GENERAL OF CANADA IMPLEADED PARTY – Defendant in warranty JUDGMENT [ 1 ] Imperial Tobacco Canada Ltd. seeks leave to appeal an interlocutory judgment of the Superior Court, District of Montreal (the Honourable Mr. Justice Brian Riordan) rendered during trial on June 5, 2012 that dismissed its amended motion for a sealing order (articles 2, 4.1, 4.2, 13, 20, and 46 C.C.P. ) with respect to eight documents that it had disclosed to the plaintiffs.

It contends that the content of these documents is highly confidential to its business operations, although it does not dispute their relevance or admissibility to the trial of these class actions. [ 2 ] Despite the plaintiffs having agreed to use several other similarly disclosed documents on a redacted basis, they refused Imperial Tobacco's request that the eight documents in question be filed in a redacted form. [1] The principal conclusions of its amended motion seek to have the trial judge: • declare the documents confidential; • order that they be filed under seal, and that the information they contain and testimony related thereto not be disclosed to the public; • order that they be accessible only to the plaintiffs or the plaintiffs' representatives and the Attorney General of Canada's representatives who have signed pre-trial confidentiality undertakings, as well as their respective attorneys, experts, the trial judge and his clerk; • order that access to the documents will further be limited to the attorneys and experts of the co-defendants RJR Tobacco and Rothmans, Benson Hedges, but not to the co-defendants themselves; • reserve Imperial Tobacco's right to seek in camera hearings with respect to any testimony during the trial regarding the documents. [ 3 ] The parties agree that the judgment of the Superior Court falls within the ambit of the second paragraph of

article 29 C.C.P ., and is properly subject to leave being granted. The outcome of the petitioner's motion therefore turns on

article 511 C.C.P ., that is, whether it is in the interest of justice that leave be granted. [ 4 ] The documents are described in the judgment as follows: • MRS6549 1982 ITL Marketing Plans (117 pages) (Pièce 292-82Conf) • MRCF2263 1988 ITL Marketing Plans written in June 1987 (81 pages) • MRS6554 a second 1988 ITL Marketing Plans (123 pages dont ITL ne demande pas la confidentialité des pages 5 à 15 qui se trouvent dans le domaine public) • MCS612 a third 1988 ITL Marketing Plans that appears to be an updated version of MRS6554 (104 pages dont ITL ne demande pas la confidentialité des pages 2 à 13 qui se trouvent dans le domaine public)

• MRACF21 a 1994 strategy document entitled "RE: PROJECT X" dealing with the possible enactment of "plain packaging" legislation (12 pages) • MSDS373 a 1987 document entitled "Consumer Research F'87 Plans containing information regarding marketing research objectives, Projects CMA and Image, key brand strategy measures and various budgetary and costs contemplated or incurred in connection with market research (130 pages) • MRS21155 TL's Marketing Research Library Listing showing the information contained in that library, indicating a date of July 1998 (over 660 pages) • MRS4763 A series of monthly marketing surveys entitled "Continuous Market Assessment" ("CMAs") done by ITL over several decades and stored on microfiche (approximately 35,000 pages) [ 5 ] The trial judge began his analysis of the applicable law by noting that Imperial Tobacco's concerns were less directed to the plaintiffs and the public than they were to the co-defendants, its competitors in the Canadian market.

Its fear, he said, was that the documents disclose marketing strategies that would assist the co-defendants in broadening their own market share to Imperial Tobacco's detriment. [ 6 ] He then canvassed the impact of the judgments of the Supreme Court of Canada in Sierra Club of Canada v. Canada (Minister of Finance) [2] and that of Gascon, J., as he then was, in Marcotte v.

Fédération des caisses Desjardins du Québec . [3] [ 7 ] In citing from paragraphs 53 – 55 of the reasons of Iacobucci, J. in Sierra Club , the trial judge noted that whether a confidentiality order ought to be granted depended on satisfying the double criteria of necessity and proportionality, and that "[…] the open court rule 'only yields where the public interest in confidentiality outweighs the public interest in openness'." [4] [ 8 ] In referring to Marcotte , the trial judge observed that the request for sealing orders was dismissed because the financial institutions had failed in their burden to convincingly demonstrate that their request took precedence over the fundamental principle of the public nature of judicial proceedings, and quoted from the judgment as follows: [107] En l'espèce, ce principe s'accorde mal avec l'idée de cacher au public, au premier chef aux milliers de consommateurs touchés par les deux recours, une donnée aussi centrale que celle touchant les montants générés par les défenderesses par les frais de conversion de devises dénoncés. [ 9 ] He further noted that that in the two cases before him, there were in excess of two million members of the respective classes whose psychological and physical health was in issue.

If the circumstances in Marcotte caused a Superior Court colleague to hesitate before denying the members of that class access to financial information affecting them, it was all the more appropriate that the dual requirements of necessity and proportionality weigh heavily in favour of confidentiality before information relating to the well-being of the class members in this case be withheld from them. [ 10 ] The trial judge summarized the burden incumbent on Imperial Tobacco thusly: [18] En résumé, voici les critères auxquels doit satisfaire ITL pour que ces objections soient accueillies :

a) faire une démonstration convaincante de la nécessité d'une ordonnance de confidentialité pour écarter un risque réel et important qui menace gravement un intérêt commercial ayant une importance publique et non uniquement et spécifiquement en rapport avec son propre intérêt commercial privé; et

b) convaincre le Tribunal que les effets bénéfiques d'une telle ordonnance l'emporteraient sur les effets préjudiciables sur l'intérêt du public dans la publicité des débats judiciaires. [ 11 ] When reduced to its essentials, the decision of the trial judge to dismiss Imperial Tobacco's amended motion with respect to the documents enumerated in paragraph [4] above was based on two factors.

The first is that the current legislative context in which tobacco products may be marketed [5] differs considerably from that which obtained during the period the documents cover; and second, the stale nature of the information and data contained in the documents does not render them susceptible to the exceptional protection of a sealing order. [ 12 ] With respect to the sealing order requested for the documents referred to as MRS4763 – the continuous monthly market assessments done over several decades of approximately 35,000 pages and stored on microfiche, the trial judge reserved his decision until further discussion with the parties. [ 13 ] Although Imperial Tobacco sought only a reserve to request in camera hearings with respect to testimony relating to the documents, the trial judge saw no procedural obstacle (such as that of ultra petita ) to adjudicating the request definitively in his judgment.

Relying in part on the case management powers of the court under

article 1045 C.C.P ., his reasoning was that there was already a conclusion in the motion that the information in and testimony related to the documents not be disclosed to the public, which effectively amounted to a request for in camera hearings. He then proceeded to dismiss the request on the basis that since the documents would not be sealed, the general rule as to the public nature of judicial proceedings would govern the conduct of the trial insofar as the documents were concerned. [ 14 ] In its motion for leave to appeal, Imperial Tobacco asserts no less than 12 proposed grounds of appeal should leave be granted. Insofar as the application of

article 511 C.C.P. is concerned, it argues in its motion that the trial judge misapplied the relevant jurisprudential criteria and evidentiary burden incumbent on an applicant for a sealing order in the context of class action proceedings. It further asserts that the issue it raises of "the balancing of the protection of competitively sensitive commercial information and the principle of public debate and disclosure is an important issue that merits the Court's review, especially in light of the distinctions drawn by the trial judge for class action proceedings."

[ 15 ] Imperial Tobacco does not contend, as I understand its position, that the trial misstated the existing principles arising out of, in particular, the Supreme Court's judgment in Sierra Club . In its enumeration of the alleged errors the trial judge supposedly committed, it does not single out as one of them the extract from paragraph [18] of his judgment that I have quoted at paragraph [10] above. Rather, the essence of Imperial Tobacco's argument is that the trial judge misapplied these existing principles to the circumstances he had before him. [ 16 ] It is trite law, however, that the interests of justice criterion in

article 511 C.C.P. will not necessarily be established by the assertion that a trial judge has misapplied a properly stated principle or rule of law. [ 17 ] Much of Imperial Tobacco's argument before me and in its motion focuses on the trial judge's treatment of the assertions in an affidavit of Paul Ricard, a former Imperial Tobacco executive, in which Mr. Ricard testified about the confidential nature of the information in the documents. For example, subparagraphs 20(

d) and 20(

h) of the motion, under the heading "Manifest Errors", allege what follows: (

d) He erred in paragraphs 27 and 35 of the Judgment, when he minimized the importance of protecting the marketing plans given the marketing prohibitions contained in the Tobacco Act , as he ignored paragraph 26 of Mr. Ricard's affidavit that references the exceptions to the general prohibition and the fact that these marketing strategies remain relevant and competitively sensitive information. (

h) He erred in holding, in paragraphs 40, 48, 53 and 63 of the Judgment, that the fact that the Confidential Documents dated back ten or twenty years mitigated against protection, when the uncontested evidence presented by ITCAN and Plaintiffs during their examination of Mr. Ricard, was that the said information remains competitively sensitive and confidential today. [ 18 ] It is essentially based on Mr. Ricard's affidavit and testimony before the trial judge that Imperial Tobacco asserts the confidential nature of the documents. It is indeed the case that there was no evidence led that contradicted Mr.

Ricard's testimony, although it must be said that much of his testimony is more in the nature of opinion evidence than it is testimony of fact [6] . [ 19 ] In any event, no trial judge is bound to accept uncontradicted evidence as establishing the truth of the facts described. In this case, the trial judge gave adequate reasons to explain why he did not accept Mr. Ricard's testimony at face value. [ 20 ] Very clearly, the trial judge did not believe Mr.

Ricard's testimony, or at a minimum, he did not ascribe the same degree of importance to the possible impact on Imperial Tobacco's future market share of the revelation of the information in the documents it seeks to shield. That was well within the trial judge's discretion. Accordingly, the probability that a panel of this Court would hold otherwise if I were to grant leave is very low, especially since Mr.

Ricard testified before the trial judge, even if the Court were not to share all of the trial judge's reasoning. [ 21 ] In such circumstances, I do not believe that the interests of justice militate in favour of granting leave, and I would therefore dismiss Imperial Tobacco's motion with costs. In doing so, however, I would be remiss if I did not acknowledge the excellence of the written and oral presentation of counsel for Imperial Tobacco, and the equally cogent oral argument of counsel for the plaintiffs. FOR THESE REASONS: [ 22 ] The motion for leave to appeal is dismissed with costs. ALLAN R. HILTON, J.A.

Mtre Silvana Conte Mtre Nancy Roberts OSLER, HOSKIN & HARCOURT For the petitioner Mtre Marc Beauchemin De GRANPRÉ CHAIT For the respondents Mtre Jean M. Leclerc GILBERT SIMARD TREMBLAY For the impleaded party Date of hearing: June 27, 2012