Velsoft Training Materials Inc. v. Global Courseware Inc., 2012 NSSC 295

SUPREME COURT OF NOVA SCOTIA Citation: Velsoft Training Materials Inc. v. Global Courseware Inc. 2012 NSSC 295 Date: 20120802 Docket: Hfx No. 341894 Registry: Halifax Between: Velsoft Training Materials Inc. and Velsoft International Inc. Plaintiffs v. Global Courseware Inc., Glen Myers a.k.a. Joe Myers, Lori Gillin a.k.a. Michelle Masterson and Charissa Fraser a.k.a. Maria Fraser Defendants LIBRARY HEADING Judge : The Honourable Justice Michael J. Wood Heard: July 30, 2012 in Halifax, Nova Scotia Written Decision: August 2, 2012 Subject: Civil Procedure - Disclosure of Electronic Information

Summary: The defendants brought a motion to compel further disclosure of electronic information by the plaintiffs.

Issue: Should the plaintiffs be required to provide further disclosure of electronic information? Result: The defendants did not provide evidence to show that there were any specific electronic records or categories of records which were relevant and not disclosed by the plaintiffs. The court decided that the search criteria used by the plaintiffs in reviewing their electronic files did not have to be disclosed pursuant to CPR 16. The defendants ’ motion for further production was dismissed as being premature.

The plaintiffs were ordered to provide additional information in their affidavit of disclosure to comply with CPR 16. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA Citation: Velsoft Training Materials Inc. v. Global Courseware Inc., 2012 NSSC 295 Date: 20120802 Docket: Hfx No. 341894 Registry: Halifax Between: Velsoft Training Materials Inc. and Velsoft International Inc. Plaintiffs v. Global Courseware Inc., Glen Myers a.k.a. Joe Myers, Lori Gillin a.k.a. Michelle Masterson and Charissa Fraser a.k.a.

Maria Fraser Defendants

Judge: The Honourable Justice Michael J. Wood Heard: July 30, 2012, in Halifax, Nova Scotia Written Decision: August 2, 2012 Counsel: Stewart Hayne, for the plaintiffs Dennis James, for the defendants By the Court : [ 1 ] This is a motion brought by the defendants for an order requiring the plaintiffs to fulfill their disclosure obligations under the Civil Procedure Rules . The defendants argue that the plaintiffs ’ disclosure is incomplete in the sense that not all relevant electronic information has been disclosed.

In addition, they say that the contents of the disclosure affidavit which has been provided is deficient. [ 2 ] Disclosure of electronic information is dealt in Civil Procedure Rule 16 . That Rule contemplates the possibility that the parties might reach an agreement with respect to electronic disclosure and, in the absence of such an agreement, sets out various default provisions which are to apply.

In this case, no disclosure agreement was reached and, therefore, the default provisions of the Rule must be followed. [ 3 ] The default search obligation is found in CPR 16.08 and includes the following: Sufficient search (default provision) 16.08

(1) A party who does all of the following performs a sufficient search for relevant electronic information: . . . . (

c) performs all reasonable searches, including thorough keyword searches, to find relevant electronic information in the computers, storage media, or other sources; [ 4 ] Civil Procedure Rule 16.09 requires a party to a defended action to deliver to each other party an affidavit disclosing relevant electronic information. That Rule provides, in part: Disclosure in an action (default provision) 16.09

(3) The person making the affidavit must swear to, or affirm, all of the following:

. . . . (

b) the person has searched, or has supervised a search, for relevant electronic information in computers and storage media the party actually possesses and in sources exclusively accessed by the party; . . . . (

d) an attached

Schedule A is provided in print and in a readily exchangeable electronic format, describing each discrete item of electronic information according to identification number or letters, date of creation, type of communication or other information, author or author and organization, and recipient. . . . . (

h) an attached

Schedule D describes relevant electronic information once, but no longer, in the control of the party and provides details about how the party ceased to have control of it; [ 5 ] The starting point in the defendants ’ argument is the large discrepancy in the amount of electronic information identified as relevant by the parties. The plaintiffs have identified and disclosed 2,783 items. The defendants have identified for disclosure 68,292 records.

The defendants essentially say that such a discrepancy can only be explained on the basis that the parties have not applied the same search criteria in their review of the electronic records. The defendants have disclosed the particular criteria which they used, but the plaintiffs have not.

Counsel for the plaintiffs acknowledges that the search criteria is relevant and could be requested during discovery examinations, but said that it is not required as part of the CPR 16 disclosure. [ 6 ] The basic position of the defendants is that the Civil Procedure Rules contemplate that the parties will make a good faith effort to try and agree on the criteria to be used in conducting searches for electronic information to be disclosed. In other words, each party should apply the same relevance analysis in reviewing their electronic records.

Even in the absence of an agreement, the parties should be required to disclose the criteria which they used so that the other parties know the basis on which the affidavit of disclosure was prepared. [ 7 ] In many cases, discovery examinations include questions directed at identifying additional undisclosed documents to be produced. Counsel for the defendants does not believe that disclosure of the electronic search criteria should be left to the discovery process.

He suggests that this would result in bifurcation with an initial discovery on the scope of disclosure followed by an adjournment to deal with newly identified records. It would then be necessary to have a second discovery on the substantive issues. [ 8 ] The position of the plaintiffs is that the defendants have not provided a sufficient evidentiary basis for their motion and, in any event, the motion is premature.

Counsel for the plaintiffs points out that the three individual defendants are former employees of the plaintiffs, and as such would have significant information concerning the operation of the plaintiffs ’ business. He says that it is significant that there is no affidavit filed on behalf of the defendants identifying any specific documents or categories of documents which are absent from the plaintiffs ’ disclosure.

He referred the Court to the Sedona Canada Commentary on Proportionality in Electronic Disclosure & Discovery (Sedona Conference: October, 2010) which stated as follows at p. 10: Requests for further production should be reasonably specific and targeted, and the requesting party will have the onus to establish, by convincing evidence rather than mere speculation, that specific additional documents exist and are relevant to the substantial issues in dispute. In White v. Winfair Management Ltd. , the court stated:

[t]he choice as to what documents in a party’s possession are relevant and should be produced is in the first instance up to the party making production. This is subject to abuse, as a party may not disclose relevant documents, either by design or because of a genuine dispute as to relevance. The onus then is on a party alleging that relevant documents have been omitted from an affidavit of documents to lead convincing evidence, as opposed to mere speculation, as to the existence and relevance of the documents sought.

Often this evidence is obtained by conducting an examination for discovery and asking questions as to the existence of documents, although it is not necessary to first conduct discovery if convincing evidence otherwise exists. [ 9 ] In addition, reference was made to the decision of Master Sandler of the Ontario Supreme Court - High Court of Justice in Bow Helicopters v. Textron Canada Ltd. , [1981] O.J. No. 2265 where he stated at para. 9: 9 In effect, the plaintiff is saying that general experience suggests that there must be more documents, but nothing specific can be pointed to at this time.

This is insufficient material on which to make an order for a supplementary affidavit on production. The plaintiff’s counsel should ask each of the defendants on their discovery, questions which would elicit answers that may show the actual existence of the design and test documents referred to, and if they exist, then orders for their production can be sought.

In fact, on the discovery of Textron, an undertaking was given to produce certain design guides used by it in designing the components for the helicopter in question and if this undertaking is not complied with, then the plaintiff can apply for the appropriate order. [ 10 ] I agree with the sentiments expressed in these authorities. If the court is to order further disclosure, it needs to have an evidentiary basis for doing so. A mere difference in the number of documents produced is not sufficient.

In this case, the defendants have not provided any specific evidence indicating that documents or category of documents which are relevant have been omitted from the plaintiffs ’ production. [ 11 ] I also agree with counsel for the defendants that he is entitled to know the search criteria used by the plaintiffs in order to determine whether he wishes to challenge the scope of the information disclosed. I do not agree that the language of CPR 16 requires this information to be included in the affidavit of disclosure itself.

The existing Rules provide a number of avenues through which the parties can identify and deal with any issues with respect to the scope of disclosure of electronic information and these include: 1) Reaching an agreement for disclosure in accordance with CPR 16.05 which would include the search parameters to be used. 2) Writing to counsel for the other parties specifying the search criteria which they consider to be relevant and requesting that these be included in the review of electronic records.

If the other party refuses the request and the court determines that they should have agreed, this might be relevant to the issue of costs of that subsequent production motion. 3) Sending an interrogatory requesting disclosure of the search parameters following receipt of the affidavit disclosing electronic information. 4) Questioning the party or its litigation manager at discovery on the search parameters. [ 12 ] Which mechanism is used in any particular case will depend upon the circumstances, litigation strategy and client instructions.

In this case, I am satisfied that the defendants have the ability to explore the scope of the plaintiffs ’ disclosure in advance of the substantive discovery examinations if they wish to do so. It would be premature for this Court to issue an order requiring further production on the basis of the existing evidentiary record. [ 13 ] I will now deal with the other aspect of the defendants ’ motion which relates to the adequacy of the affidavit and schedules which have been provided by the plaintiffs. [ 14 ] Civil Procedure Rule 16.09(3)(

d) identifies specific information which must be provided with respect to each item of electronic

information, and this includes date of creation, type of information, author and recipient. On reviewing the

Schedule A attached to the affidavit of David MacNeil, sworn July 12, 2012, it is apparent that many of the entries do not include the required information. For example, there are several hundred items for which there is only a date sent, a sender and a recipient. There is no indication of the author, date of creation or type of information (i.e. e-mail, letter, etc.). Counsel for the plaintiffs acknowledged this apparent deficiency during the hearing and agreed that a further review of the records should be undertaken and additional information provided, if available. [ 15 ] Counsel for the defendants submitted that the

schedule should also include a description of the device on which each record was found and the custodian of that device. There is nothing in CPR 16 which requires this additional information to be included in the affidavit and, in my view, this request goes beyond what is contemplated by that Rule . The information to be included in the schedules to the affidavit of disclosure should be enough to identify the piece of information.

Details, such as where the information was found and in whose custody, are more appropriately dealt with through the further discovery process using interrogatories or oral examinations. [ 16 ] Some of the electronic documents disclosed by the plaintiffs have been redacted although the reason for the redaction is not noted on the document. Counsel for the plaintiffs says that they are for relevance and privilege. Counsel for the defendants requests that further explanation be provided for each redaction so that they can determine whether to challenge the position taken by the plaintiffs.

Counsel for the plaintiffs agreed to provide these particulars. [ 17 ] The defendant also raised an issue with respect to the plaintiffs ’ destruction of the e-mail accounts of the individual defendants. Civil Procedure Rule 16.03(2)(

b) provides as follows: 16.03

(2) A party must also disclose all of the following about relevant electronic information: . . . . (

b) information about any deletion or destruction of relevant electronic information of which the party is aware; [ 18 ] The plaintiffs ’ affidavit includes a general statement indicating that some electronic information had been deleted in accordance with the normal course of business. Counsel for the plaintiffs submitted that this was the extent of the disclosure required under CPR 16 and that it was not necessary to provide any further particulars. Counsel for the defendants argued that this might suffice for routine deletion of information but not for the complete destruction of important e-mail accounts.

He submitted that the defendants should have more information concerning when the destruction occurred, for what reasons and the server on which the accounts had been stored. He made the analogy to claims of privilege where a party should provide sufficient information with respect to the document in question to allow the other party to decide whether to challenge the assertion of privilege. [ 19 ] Civil Procedure Rule 16.03(2)(

b) requires disclosure of information concerning the destruction or deletion of electronic information. That Rule does not indicate how the disclosure is to take place. In my view, the logical way to provide this information is through

Schedule D to the affidavit of disclosure. Civil Procedure Rule 16.09(3)(

h) requires this to include disclosure of details about electronic information which is no longer in the control of the party as well as how they ceased to have control of it. [ 20 ] While a general statement such as that used by the plaintiffs might be sufficient for routine deletions of electronic information, I agree with counsel for the defendants that destruction of the defendants ’ e-mail accounts falls into a different category. Some additional information should be provided concerning those events; however, I would not go as far as the defendants have suggested.

I believe that the plaintiffs ’ disclosure obligation under CPR 16 would be satisfied by identifying the date of destruction, the reason for the destruction and the person(

s) who made the decision to delete the accounts. Any further details should be left to the discovery process. [ 21 ] In conclusion, I am not satisfied that the defendants have met the onus necessary to justify an order for further production from the plaintiffs at this time. I agree that the plaintiffs ’ affidavit of disclosure is not sufficient, and will order that they provide additional information in

Schedule A in order to comply with the requirements of CPR 16.09(3)(d) . I also order that they give further details concerning destruction of electronic information in accordance with CPR 16.03(2)(

b) and 16.09(3)(h) , and provide explanations for the redactions which have been made.

[ 22 ] I am prepared to receive submissions from the parties on the issue of costs arising out of this motion in the event that they cannot reach an agreement. ____________________________________ Wood, J.