Halifax (Regional Municipality Pension Committee) v. State Street Global Advisors Ltd., 2012 NSSC 399

SUPREME COURT OF NOVA SCOTIA Citation: Halifax (Regional Municipality Pension Committee) v. State Street Global Advisors Ltd., 2012 NSSC 399 Date: 20121115 Docket: Hfx 309063 Registry: Halifax Between: The Halifax Regional Municipality Pension Committee Plaintiff v. State Street Bank and Trust Company and State Street Global Advisors Ltd./Conseillers En Gestion Global State Street, Ltée Defendant DECISIONS: Motion to amend Order of December 01, 2011 Motion to set Hearing date for

Summary Judgment Motion Judge: The Honourable Justice Patrick J. Duncan Heard: By Correspondence Counsel: George MacDonald, Q.C., Jane O'Neill, and Peter Rogers, Q,C, for the plaintiff Michael Ryan, Q.C., John Keith, and Michael Dube for the defendants By the Court : Introduction

[ 1 ] My decisions reported as Halifax (Regional Municipality Pension Committee) v.

State Street Global Advisors Ltd. , 2011 NSSC 355 and at 2011 NSSC 447 responded to, among many things, a motion brought by the defendants that sought an order to compel the plaintiff to expand the parameters of their search for relevant documents and electronic information, and to disclose such information as those searches reveal. see, at paragraphs 237-301 in 2011 NSSC 355; and at paragraphs 15-27 in 2011 NSSC 447 . [ 2 ] The plaintiff now seeks relief from what it says are inordinate burdens arising from those decisions and so has brought a motion to amend certain terms of the resulting order which was issued December 1, 2011.

The defendant is opposed to the motion. [ 3 ] The plaintiff also seeks to fix dates for hearing of its Motion for

Summary Judgment. Motion 1: To vary the plaintiff's production requirements as set out in an order of the court dated December, 1, 2011. [ 4 ] The parties are engaged in a complex litigation piece with substantial resources already committed to the fight, and the promise of even more expense to be incurred. The costs are undoubtedly beyond what the vast majority of litigants could bear, but the remedy sought, the payment of $50 million plus interest and damages to the plaintiff, is a very substantial one.

For as much as the parties have been able to agree to, as they wind their way through the path to a trial, there have been regular and contentious disputes sometimes requiring resolution by the court. [ 5 ] The parties control substantial electronic records that have been subject to searches for relevant documents.

My various decisions underlying the December 1, 2011 order sought to ensure the fulfillment of the requirements for disclosure pursuant to the Rules but to do so in a way that was not overly broad, and that recognized the differences in the character, purposes and resources of the parties. [ 6 ] To accomplish that, the order included 51 keyword terms (search terms) that the parties are required to apply to their searches of e-documents. [ 7 ] The application of those terms to searches for documents within the control of the parties has proceeded without further objection, and disclosure has been made of relevant documents located using the search terms - until this motion.

The plaintiff now expresses concern that some of those terms, when applied in the context of searching a server controlled by a non-party, Halifax Regional Municipality (HRM), generated substantial false hits and consequently are inefficient and have created an excessive demand on resources. As a result, the plaintiff seeks relief from application of some of the search terms when applied to the HRM server document searches. [ 8 ] In support of its motion and proposed disposition, the plaintiff has filed affidavit evidence of Rachel Barnes, a paralegal with McInnes Cooper. Ms.

Barnes acts as a coordinator for the plaintiff's efforts to identify and produce relevant documents. In the context of this motion she is a conduit of information as among legal counsel for the plaintiff, HRM legal services staff, Commonwealth Legal (the plaintiff's external litigation document management specialist), and various others whose information and control is necessary to her tasks. [ 9 ] I also have a transcript of an out of court cross-examination upon that affidavit, conducted by counsel for the defendants. Ms. Barnes' evidence is a collection of first- hand knowledge, hearsay and double hearsay.

I have instructed myself accordingly to assess the source of her information and what, if any, weight should be attached to her testimony. [ 10 ] Ms. Barnes' evidence very succinctly describes the problem encountered by the plaintiff. [ 11 ] HRM is not a party to this action. It is, or was, the employer of the plaintiff's committee members or alternates (members). The HRM server was used by a number of the members for email correspondence and so the task of the plaintiff was to obtain the

cooperation of the members and of HRM, in conducting the searches. The plaintiff describes, in its brief, the underlying problem as follows: 10. Some of the Members are lawyers or senior municipal administrators. In some cases, McInnes Cooper has acted or acts in matters in which HRM is adverse in interest to McInnes Cooper clients. As such, these members' emails may contain sensitive, privileged, or confidential emails…. 12.

In light of these concerns about sensitive, privileged or confidential information in Members' emails, HRM Legal Services advised the Plaintiff that HRM would only provide McInnes Cooper with access to the Members HRM-hosted active, deleted and archived emails if HRM Legal Services could first review and screen the emails, and if the Members themselves consented to such access. If the emails could not first be screened before they were provided to McInnes Cooper, HRM Legal Services would have refused to permit the Plaintiff to have access to them. 13.

HRM Legal Services' agreement to review the emails was conditional on HRM Legal Services also being satisfied that it had the capacity and resources to review the emails. This capacity was contingent on the number of emails which HRM Legal Services would be required to review. [ 12 ] Ms.

Barnes' evidence details the complications that were encountered and the steps taken to overcome a number of hurdles that presented in correctly identifying the persons whose emails were likely to be found in the HRM server, paring down the search for the relevant time period, and building in appropriate mechanisms to eliminate sensitive non relevant information such as police investigative files. [ 13 ] The initial search was conducted and it is alleged that 23,876 documents were identified for review. CWL then eliminated 7,498 as duplicates.

Twelve thousand (12,000) of the 16, 378 documents remaining to be reviewed were emails and the balance were attachments. HRM Legal Services took the position that it did not have the necessary resources to conduct a review of so many documents, in order to identify material that HRM feels should be restricted from McInnes Cooper scrutiny. [ 14 ] To respond to that problem, the plaintiff instructed Commonwealth Legal (CWL) to revise the search terms to try to reduce "false positives". Ms.

Barnes provided a "general description of each of the most generic search terms" to CWL to assist them in their review of search terms and documents to arrive at an amended set of search terms which would capture possibly relevant documents without attracting so many "false positives". [ 15 ] CWL then "sampled approximately 10% of the 'hits'. The conclusion was that 11 of the 51 search terms were the most generic and produced the largest number of false positives. Ms. Barnes' affidavit sets out the reasons that these terms are generating so many false positives and suggests a variety of solutions that include:

i) Reducing the places for searching for a term. e.g. only look for "LB" at the beginning of a word to eliminate references where LB might appear in the middle of a word such as Alberta ( LB is an common acronym for Lehman Brothers); ii) Eliminating a search on a single word and instead searching for it in combination with a related term. e.g. the term "Edge" would no longer be searched for as a stand-alone term but would be searched in combination with other related terms. e.g., "Alpha Edge" or "Edge Fund" (Alpha Edge Funds were a form of investment that is relevant to the claim); iii) Adding an additional name or descriptor to the search relative to a person. e.g. instead of searching for "Jason" the search would be conducted using "Jason" plus an initial, or a first name, a surname, or an indicator of status such as "Mr.". [ 16 ] A search using an amended list of terms was run by CWL (prior to making this motion).

Some further refinements to the search terms were made and ultimately a total of 1,571 documents were identified for HRM review. HRM completed that review and then McInnes Cooper conducted a further review of the material released to them by HRM. Forty-six (46) documents were identified as relevant and disclosed to the defendants.

[ 17 ] The plaintiff seeks 14 proposed changes to the search terms which it argues will make the total number of documents to be reviewed by HRM more manageable, while fulfilling the plaintiff's objective to locate and disclose relevant documents. Ms. Barnes testified that it is possible that some of the proposed changes may capture information that is relevant that the existing terms would not.

Analysis [ 18 ] The plaintiff submits that the authority of the court to vary the order stems from the inherent jurisdiction of the court; from the power of the court to give directions for disclosure as contemplated in Rule 15.07 and Rule 16.14 ; or as being within the authority of the Case Management Judge set out in Rule 26.02 and Rule 26.04 . [ 19 ] I accept that I have jurisdiction to consider a motion to revise the orders for production. An obvious example of the necessity for such authority is where in the course of a search additional information is located that suggests a new or varied line of inquiry.

However, any order of the court for production is subject to the requirements for full disclosure as set out in Rule 14.08(1) . For convenience of reference I have set out the entirety of this provision: 14.08

(1) Making full disclosure of relevant documents, electronic information, and other things is presumed to be necessary for justice in a proceeding.

(2) Making full disclosure of documents or electronic information includes taking all reasonable steps to become knowledgeable of what relevant documents or electronic information exist and are in the control of the party , and to preserve the documents and electronic information.

(3) A party who proposes that a judge modify an obligation to make disclosure must rebut the presumption for disclosure by establishing that the modification is necessary to make cost, burden, and delay proportionate to both of the following: (

a) the likely probative value of evidence that may be found or acquired if the obligation is not limited; (

b) the importance of the issues in the proceeding to the parties.

(4) The party who seeks to rebut the presumption must fully disclose the party's knowledge of what evidence is likely to be found or acquired if the disclosure obligation is not limited.

(5) The presumption for disclosure applies, unless it is rebutted, on a motion under Rule 14.12, Rule 15.07 of Rule 15 - Disclosure of Documents, Rules 16.03 or 16.14 of Rule 16 - Disclosure of Electronic Information, Rule 17.05 of Rule 17 - Disclosure of Other Things, or Rule 18.18 of Rule 18 - Discovery.

(6) In an application, a judge who determines whether the presumption has been rebutted must consider the nature of the application, whether it is chosen as a flexible alternative to an action, and its potential for a speedier determination of the issues in dispute, when assessing cost, burden, and delay. (emphasis added) [ 20 ] If one looks at Rule 16.14 (3) it states that:

(3) A judge may limit preservation or disclosure in an action only to the extent the presumption in Rule 14.08 , of Rule 14 - Disclosure and Discovery in General, is rebutted. [ 21 ] So the authority to vary, where the object is to limit disclosure in some way, yields to Rule 14.08. [ 22 ] The plaintiff says that it is not trying to limit disclosure but is simply trying to get relevant information in the most reliable yet cost effective way. [ 23 ] The defendants submit that the remedy sought amounts to a limitation that has not been applied by either party in relation to any other search conducted by them of other sources.

The defendants say that there was good reason to use the 51 search terms, and that this motion is generated for the convenience of HRM, arising from their concern for the potential conflict of interest as between HRM and McInnes Cooper.

The defendants do not concede that the proposed methodology will capture all relevant documents and they submit that this motion is actually an argument seeking to modify disclosure due to the cost, and burden of disclosure. see, Rules 14.03 and 14.04 . [ 24 ] I have reviewed and informed myself as to legal principles of disclosure set out in Nova Scotia Civil Procedure Rules 14-16 , and as I discussed in paragraphs 20-39 of my decision reported at 2011 NSSC 355 . I will not restate them here. [ 25 ] My first decision reported at 2011 NSSC 355 consists of 134 pages, and has 351 paragraphs.

It responded, among other things, to the plaintiff's motions relating to 9 categories and numerous subcategories of sought after production. It responded to the defendants' motions for production in 5 categories and a number of subcategories. Both parties advanced their arguments as to the search terms and the burdens associated with responding to each other's requests.

In the conclusion, a balance was struck which sought to provide a consistent, achievable and integrated approach to addressing complex questions of identifying and producing relevant electronic and other materials. [ 26 ] The decision incorporated and relied upon the joint view of counsel that the search terms were the most appropriate ones to identify relevant information for disclosure.

In my view, there must be compelling reasons to upset that balance by selectively isolating the application of the search terms by one party to a potentially significant source of e-documents. [ 27 ] The plaintiff's objective is to reduce the number of documents that HRM needs to review. This is a resourcing problem, not a legal question. It is a resourcing problem that exists because the plaintiff's legal counsel is seen by HRM as being in conflict with the interests of HRM. To accommodate the plaintiff, HRM created an intermediate step to vet information provided to plaintiff's counsel.

Such a position is reasonable. However, if the conflict did not exist then HRM's concerns may not have arisen. When the search terms were applied, as they had been for other document banks, HRM balked at the number of documents to be reviewed. [ 28 ] The problem created here is potentially resolvable with time and money. It will not require the plaintiff to change its legal counsel, but the plaintiff must be prepared to absorb the consequences of its choice of counsel in these circumstances.

So if it takes HRM longer to conduct the reviews then that is the consequence unless the plaintiff can find ways to assist HRM. The defendant should not be put at risk of a disadvantage in these circumstances. [ 29 ] There are other concerns. [ 30 ] The evidence adduced in the motion does not satisfy me that the results of the revised search will reliably capture all relevant documents subject to disclosure.

[ 31 ] The eleven altered search terms employed by CWL to this point (some were actually omitted in favor of their combination with other "generic" terms), while minimizing the number of documents to be reviewed, do not comply with the order, do not match the searches done of every other information bank, and relies on CWL's assessment of relevance in what would be captured and what would be omitted from the search result. [ 32 ] I have no direct evidence from CWL and am not satisfied that the evidence shows CWL to have the capability to reliably identify relevant documents subject to disclosure.

I have little evidence upon which to assess the correctness of CWL's assessment of what constituted a "false positive". I am particularly concerned because the context in which the revised search was conducted intended to minimize the number of documents to be reviewed. I cannot say whether CWL sacrificed the quality of the search to meet the goal of reducing the quantity of captured documents. [ 33 ] I am asked to assess, in a relative vacuum, what specific combinations of search words will fulfill the required production objectives but without taxing the HRM legal staff with inordinate false hits.

The following demonstrates the difficulty I face in trying to assess the appropriateness of the proposed variation. [ 34 ] Some of the evidence describes how a variation of the search terms would reduce the number of documents captured. E.g. By eliminating "A Drew" and "A. Drew" and using the terms "Drew and RBC" and "Drew and Dexia" the number of documents to be reviewed dropped from 3,264 to 1,571.

So while the parties know that "A Drew" is a search term that could generate relevant information, I am asked to eliminate that search term thus eliminating 1,693 documents which appear to have "A Drew" in the document. It may be that it could be done without prejudice to the defendant, but with the paucity of evidence to explain what is being lost, and why, it would be unsafe for me to agree with the plaintiff. [ 35 ] I acknowledge that some proposed changes seem logical. e.g. adding an identifier such as "Alpha" to the otherwise very common term "edge".

Other proposed changes are far less compelling. e.g. eliminating a search for "Denis" as a stand-alone term would seem likely to eliminate possible relevant information. [ 36 ] The evidence before me does not provide me with any confidence as to how each change will impact on the identification of relevant documents and I am not willing to attempt to make such an assessment without that evidence.

CWL representatives may have been able to assist, but there is no direct evidence from that company. [ 37 ] The information put forward in support of this motion does not make clear whether relevant documents were identified by HRM Legal but held back because of McInnes Coopers' involvement. If that is the case, then the plaintiff may not even be aware of the existence of such relevant documents. [ 38 ] There is no evidence from HRM Legal Services as to the actual resources it will require to complete a review of the original hits.

There is no evidence that addresses whether greater resources might have been offered to assist HRM Legal to complete the larger review. A possible suggestion is to retain independent counsel, at plaintiff's expense and who is agreeable to HRM, to assist their staff in the review. [ 39 ] The defendants extrapolate from the plaintiff's evidence pertaining to the time and resources used to conduct the limited search described above and suggest that it "might" take two to three weeks to complete the search using all of the terms. They may be correct.

It is not clear to me that the resources cannot be made available to complete the review of all "hits". I cannot assess the extent to which the full review may be achievable or what period of time might be required to complete it. The evidence does not satisfy me that it would be inordinate, even acknowledging that HRM may need more time than otherwise might be required. [ 40 ] I have been provided with time and cost consequences of the plaintiff's document search up to the time of Ms. Barnes' affidavit.

It is significant, but would be consistent with what I would expect that each of the parties has encountered in seeking to fulfill their respective disclosure obligations. The plaintiff is an entity with $1.0 billion under administration and has a relatively small management team. While acknowledging the vastly greater resources of the defendants, the plaintiff must be seen as having significant

resources too. Cost and time commitments are not sufficient in my view to justify the sought after variation. [ 41 ] The question arising from the position of the parties is whether what is asked amounts to an attempt to limit disclosure thus triggering a consideration of Rule 14.03 and 14.04 , or is a simple matter of directions that would be consistent with Rule 1.01 as being "... for the just, speedy, and inexpensive determination..." of this proceeding.

In my view the plaintiff's motion fails under either analysis. [ 42 ] The use of the revised search terms necessarily limits disclosure and the evidence fails to rebut the presumption for full disclosure. [ 43 ] While I agree that the use of the revised search terms would make the search and thus the disclosure speedier and less expensive, I am not satisfied that creating a different search for one party because of a situation that is, to some extent, of its own making, and that may be remediable without changing the search terms, would result in a just determination.

There is a potential for an unjust result. [ 44 ] For these reasons I dismiss the plaintiff's motion to vary the terms of the order setting out the disclosure requirements. [ 45 ] I have responded to the motion as presented. There is, however, an important point for the parties to consider. It is open for the plaintiff to adopt the position that it has met its disclosure obligations and that the documents in the HRM server are not in the plaintiff's control. [ 46 ] In such a case, a motion for production under Rule 14.12 would likely be necessary to gain HRM compliance.

The factors listed in Rules 14.12(3) and 14.12 (4) require a court to consider the impact of the search having regard to the interests of the non-party. It is trite to point out that the considerations that dictated the terms of the search as between the parties may not necessarily be the same when assessed against the position of the non-party. It may be that seen in that context, some of the plaintiff's proposed changes to the search terms would be seen as reasonable.

The result would depend upon the evidence in the motion. [ 47 ] Perhaps the prospect of having to go through that exercise, a Rule 14.12 motion, will cause the parties to consider the wisdom of some compromise that would satisfy HRM while meeting the needs of all of the parties. [ 48 ] The first motion is dismissed. Motion 2: To fix dates for hearing of plaintiff's motion for

summary judgment . [ 49 ] The plaintiff filed a Motion for

Summary Judgment on evidence on November 1, 2011. It was scheduled for hearing on February 15 and 16, 2012. [ 50 ] In my decision reported at 2011 NSSC 447 , in paras. 36-45 , (which comments I incorporate as part of my reasoning in the current motion) I considered the effect of the failure of the plaintiff to complete its disclosure obligations and so stayed the filing dates for materials on the motion.

The re-scheduling of the motion was set over to December 15, 2011 for further submissions. [ 51 ] In the December hearing, I gave an oral decision (again which comments I incorporate in my reasons for the decision in this current motion) in which I refused to set a new date for hearing. I was concerned that the defendants were being asked to respond to the motion without full production by the moving party. I take the view that it is not the prerogative of the moving party to decide whether the information it will ultimately disclose is, or is not, relevant to the responding parties' submissions on a

summary judgment motion. I have concerns for a risk of real prejudice to a responding party to a motion for

summary judgment on evidence when it may not have all the evidence necessary to "put its best foot forward" in responding.

[ 52 ] I am reaffirmed in this view by the decision of Fichaud J.A. in Halifax (Regional Municipality) v. Casey , 2011 NSCA 69 where he stated: [29] … On a motion for "Summary judgment on evidence" under Rule 13.04 , that Mr. Casey faces, "the question of a genuine issue for trial depends on the evidence presented", and the responding party "must provide evidence in favour of the party's claim": Rules 13.04(3) and (4) . The caselaw requires the responding party to "put his best foot forward" with evidence.

Clearly the responding party, to clothe his response with maximum cogency, should have access to the relevant evidence possessed by the moving party. … [31] The point of the Rules' disclosure requirements is that the opposing parties and the court should have the benefit of all relevant evidence from both parties before disposing of the issue. That principle underlies the governing presumption in Rules 14.08(1) and (5) :

(1) Making full disclosure of relevant documents, electronic information, and other things is presumed to be necessary for justice in a proceeding.

(5) The presumption for disclosure applies, unless it is rebutted, on a motion under ... Rule 15.07 of Rule 15 - Disclosure of Documents... This presumption applies to disclosure before a

summary judgment motion to dismiss a claim. [32] … Having chosen to move for

summary judgment on the evidence, HRM/Ms. Bonang's refusal to disclose should not hobble the responding party from putting his best foot forward under the test for their motion. [ 53 ] I am now asked again to set a date for a hearing of the motion, because of the significance of the alleged loss to the plaintiff and the desire to rectify that loss in the most expeditious manner. These are legitimate reasons, and as soon as the plaintiff fulfills its production obligations, to a level that satisfies the court, if not the defendants, then the scheduling will take place.

It will require hearing from the parties when the plaintiff confirms a date by which it will serve its Affidavit of Documents. [ 54 ] The motion to set dates for hearing of a

summary judgment motion is dismissed. Duncan J.