Litigants who obtain evidence seized through Anton Piller orders, an extraordinary legal measure granted in exceptional circumstances, do not have an “automatic” right to review the material, according to a recent ruling by the Quebec Court of Appeal.
Anton Piller orders, described by the Supreme Court of Canada as a “draconian” measure, are civil search warrants that allow one party (accompanied by a bailiff and independent supervising lawyer) to launch a surprise raid on the business premises or homes of people when there is good reason to believe that one party to a lawsuit is in possession of documents or material that could be concealed or destroyed. It is considered by legal observers to be an intrusive and powerful legal remedy because no notice is given to the party against whom it is issued. Indeed, defendants only find out about the existence of the order when they are served and executed.
That’s what happened in a case pitting leading worldwide data cruncher IMS Health Canada Inc. against a former employee now working for a competitor, a new Canadian data solutions provider called TH!NK Business Insights. On December 2012 IMS Health alleged that Mark Maciw breached a confidentiality, non-competition and non-solicitation agreement, and sought an injunction. An agreement was reached between the two parties that lead Maciw to hand mirror copies of his personal computer’s hard drive to an IMS expert. An analysis of the hard drive allegedly demonstrated that Maciw accessed confidential information belonging to IMS on several occasions, and partially copied it on a USB stick. On March 2013 IMS obtained an Anton Piller order. After it was executed, Maciw and TH!NK filed a motion to dismiss the Anton Piller order. In the meantime a Quebec Superior Court judge declared that the seized evidence would remain in the hands of the independent supervising lawyer until a ruling was issued over the motion to dismiss the order – a ruling IMS appealed before the Quebec Court of Appeal.
The ruling, while it does not set out hard-and-fast rules, does settle a long-standing debate in Quebec over whether a party who has seized evidence following the execution of an Anton Piller order has access to the material, noted Karim Renno, a Montreal lawyer with Irving Mitchell Kalichman. There are two schools of thought over the issue, with one arguing that it is “very relevant to see what materials were seized in order to show the court not only that the order was justified but to determine whether additional orders should be taken,” explained Renno. The opposing view maintains that seizing parties should not be granted access because the issue that should be settled in the first place is whether there were proper grounds to obtain the order.
“Contrary to what the appellants are suggesting, in such a situation, there is not an automatic right to access seized evidence,” held Justice Clément Gascon in a unanimous 27-page ruling that provides a thorough overview of Anton Piller orders. “The judge of first instance rather must exercise judicial discretion before allowing it, taking into account notably the circumstances of the matter, the motives invoked by the motion to dismiss the order and the interests of justice.”
By coming down the middle and ruling that the judge of first instance has the discretion to either authorize or prohibit “access to the fruits of the search” in cases when a motion to quash the Anton Piller order has been filed, the Court of Appeal is ensuring a debate over the merits or the scope of the order will take place. “It is not a (judicial) discretion that can be exercised at the time when the Anton Piller order is drafted because an Anton Piller order is drafted and rendered ex parte,” pointed out Louis Sévéno, a civil and commercial litigator with Woods in Montreal, who successfully plead the case along with Marie-Louise Delisle. “The time when discretion can be exercised by the judge is when both parties are present and can be heard over why or why not the fruits of the search should be divulged.”
Following this decision, it will likely fall on the shoulders of plaintiffs to demonstrate that the order was justified without being able to use the documents that were seized to make that demonstration, said Renno. “They are going to have to justify those requests and come up with cogent reasons over why it was necessary,” added Renno. “That is why I believe it is a very good decision. Even though the courts are very demanding when faced with a request for an Anton Piller order, you are still arguing against an empty chair. This is one of those extraordinary circumstances where the due process happens after the order has been executed. Those circumstances need to stay exceptional.”
Yet because it is rather easy to destroy or move data in today’s digital world, Anton Piller orders are increasingly being sought by plaintiff’s counsel. Named after the landmark 1976 English case Anton Piller KG v. Manufacturing Process Ltd., Anton Piller orders arose from intellectual property disputes over trade secrets and industrial property but is now being used in other areas such as in employment and labour law and privacy law. “It is being used more and more but it doesn’t mean it is being granted more and more,” remarked Pablo Guzman, a partner in the Montreal office of Davis LLP. “The courts are very hesitant to grant this type of proceeding.”
Perhaps judges will be even more reluctant following the appeal court judgment, say legal experts. “It’s a very sound judgment that reminds us that an Anton Piller order is not meant to obtain evidence,” added Guzman. “An Anton Piller order is meant to freeze evidence, to protect rights and to protect it from being destroyed,”
IMS intends to file an application for leave to appeal before the Supreme Court of Canada. The evidence seized following the execution of the Anton Piller order will remain with the independent supervising lawyer until the matter is decided, said Sévéno.