The  Supreme Court of Canada  in Merck Frosst Canada Ltd. v Canada (Minister of Health) has outlined the obligations on a public body to provide notice to a third party of a request for the third party’s business information under public sector access to information legislation.  The Court interpreted the third party notice requirement in the federal Access to Information Act  in a manner that balanced the broad rights of access in the  Act against the protection of third party information.  The Court held that there was a low threshold to trigger a public body’s obligation under the Act to provide notice to a third party of an access request and decision and allow the third party to make submissions on  any exceptions in the Act that would prevent disclosure of the information. The reasoning and direction of the Court will be of interest to public bodies under the federal Access to Information Act and public bodies governed by provincial access to information legislation  as well as private sector organizations who do business with the public sector.

This decision arose out of a request to Health Canada for records related to new drug approvals sought by Merck Frosst.  The request was made by a competitor of Merck Frosst.  Health Canada disclosed some records in response to the request without providing notice to Merck Frosst under the Act, and provided notice of its access decision on the balance of the records inviting  submissions from Merck Frosst.  Merck Frosst objected to the disclosure of its confidential information without notice and provided submissions to Health Canada to support a refusal to disclose the balance of the records.  Health Canada, after considering Merck Frosst’s position on disclosure, issued its decision.  Merck applied for judicial review of Health Canada’s decision.

In the Supreme Court of Canada Merck Frosst raised three issues:  (1)  Health Canada’s failure to provide notice before disclosing certain records; (2) Health Canada’s failure to conduct an adequate review of the balance of the records before making its initial decision on disclosure, effectively “off-loading” its statutory obligation onto Merck Frosst; and (3) both Health Canada and the Federal Court of Appeal requiring an excessive standard of proof from  Merck Frosst in establishing the exceptions from disclosure.  The Supreme Court of Canada dismissed Merck Frosst’s appeal but did find some merit to its complaints about the process followed by Health Canada.

The Supreme Court of Canada found that there was a low threshold for triggering the obligation of a public body to provide a third party  with notice of an access request and decision, although it rejected a submission from Merck Frosst that certain categories of records triggered an automatic right to notice. The notice requirement in the Act is triggered when the public body has reason to believe that the disclosure of the records might be contrary to the public body’s obligation under the Act not to disclose the records. The Court found that the head of a public body should only disclose third party information without notice to the third party in clear cases, where there is no reason to believe an exemption applies.  The Court noted that disclosure without notice is irreparable and that the public body may not have enough information to make a correct judgment without input from the third party. Where the public body intends to sever excepted information from a record and disclose a redacted version, the public body must provide notice to the third party before disclosure of the redacted record.

The Court also commented on the obligation of the public body to undertake a sufficient review of the records in order to decide if the threshold for notice has been met. The public body cannot, simply by providing notice, put the entire onus of review of the records on the third party.

Finally, the Court confirmed that the standard of proof required of an party seeking to establish the application of an exception to disclosure under the Act was the civil standard of a balance of probabilities.  The Court found that both Health Canada and the Federal Court of Appeal had applied a more onerous standard, described as a “heavy burden” and a “high threshold”.  However, the Court,  applying the standard of balance of probabilities to the evidence before it, came to the same result and therefore the appeal was dismissed.

This decision  confirms the obligations of a public body in dealing with requests for third party information and the rights and obligations of a third party seeking to restrict access to information it has supplied to a public body. In some cases private sector organizations can address their rights to notice of access requests for their information by way of contract, or by clearly advising the public body that it considers the information it is supplying to be confidential and within the category of information that is excepted from disclosure under any applicable access legislation, thereby triggering the obligation of the pubic body to provide notice. However, neither contract language nor statements of confidentiality will determine whether or not the records at issue are in fact excepted from disclosure.