Overview

Last week, the Supreme Court of Canada (“SCC”) dismissed leave to appeal the Alberta Court of Appeal (“ABCA”) decision in Imperial Oil Limited v Alberta., thereby endorsing the ABCA’s approach to settlement privilege in the context of applications under the Freedom of Information and Protection of Privacy Act (“FOIPP”).[1] Settlement privilege is alive, well, and strongly protected in Alberta, even in the more public regulatory context, as long as parties fall within the exceptions set out in ss. 16 and 27 of FOIPP.

Facts

Imperial Oil Limited (“Imperial”) operated a refinery in the Lynnview Ridge area of southeast Calgary until it was decommissioned in 1975. Petroleum and lead contamination was discovered in the lands after it had been developed into a residential area. In the early 2000s, environmental protection orders relating to the cleanup were issued, some of which Imperial appealed. After a mediation process, Imperial and the Alberta Environment Director signed a Remediation Agreement on March 31, 2005 (the “Remediation Agreement”).

The City of Calgary (the “City”), as a significant landowner in the area and the municipality that approved the Lynnview subdivision, applied under FOIPP for a copy of the Remediation Agreement. Alberta Environment refused to release the Remediation Agreement on the basis of confidentiality and settlement privilege, and the City applied to the Alberta Information and Privacy Commissioner (the “Commissioner”), who ordered the agreement’s release. Imperial applied for judicial review of the Commissioner’s decision, which was quashed by the Alberta Court of Queen’s Bench. The ABCA agreed, finding that the Remediation Agreement was privileged and confidential on the basis of ss. 16 and 27 of FOIPP, which provide exceptions to production on the basis of confidentiality and privilege. On February 19, 2015, the SCC dismissed leave to appeal the ABCA decision.

Alberta Court of Appeal Decision

The ABCA struck the appeal on a narrow issue: the court found that the Commissioner had no standing to appeal a judicial review decision quashing the Commissioner’s order.[2] However, the court found that other substantive issues on appeal warranted further comment. The ABCA noted that the Remediation Agreement specifically referred to confidentiality and privilege, but also highlighted the applicability of common law settlement privilege.[3]

Section 16 of FOIPP provides exceptions to disclosure on the basis of confidentiality, drawing a line between public information in the hands of public bodies (presumptively disclosed) and private information in the hands of public bodies (may be protected from disclosure). Section 27 of FOIPP provides exceptions to disclosure on the basis of privilege, mandating that the head of a public body must refuse to disclose information subject to privilege where the information relates to a person other than the public body.[4]

Section 16: Confidentiality

Section 16 of FOIPP provides that disclosure will be refused where (a) the information reveals trade secrets, commercial, financial, labour relations, scientific or technical information of a third party; (b) the information is supplied in confidence, either implicitly or explicitly; and (c) the disclosure is reasonably expected to cause some harm or loss to third parties or others. Courts deciding whether information is disclosed under s. 16 must balance the important goal of broad disclosure, particularly in the more public regulatory context, and legitimate private interests and the public interest in promoting innovation and development.[5]

Most importantly under s. 16, parties wishing to protect their information must establish that they intended to provide the information in confidence; while parties cannot “contract out” of FOIPP, they can essentially “contract in” to the s. 16 exception by ensuring that the information is supplied in confidence. In determining intention, the “perceptions of the parties on whether they intended to supply the information in confidence is of overriding importance.”[6] The ABCA found that the Commissioner had not applied the subjective test of determining intention, and the information also met the s. 16 requirements of scientific and technical data, and harm to Imperial’s negotiating position.[7] The ABCA therefore found that the Commissioner’s decision on confidentiality was unreasonable.

Section 27: Privilege

Because of s. 27 of FOIPP, if Imperial could establish that the Remediation Agreement was privileged, this would be a complete answer to the City’s application for disclosure.[8] The City argued that the Remediation Agreement was not privileged, commenting that the City’s desire to see the Remediation Agreement was not out of idle curiosity, but because the City had outstanding issues with Imperial regarding the Lynnview Ridge remediation.[9] The court rejected this argument, commenting on the purpose of settlement privilege:

“The exact purpose of the settlement privilege is to allow the withholding of the settlement terms from an adverse party that has related unsettled claims against the party asserting the privilege.”[10]

The City was not entitled to the Remediation Agreement, and s. 27 of FOIPP precluded the Commissioner from ordering its disclosure. Most importantly, the ABCA rejected the Commissioner’s argument that the law of settlement privilege should be applied differently to disputes with a public interest component:

“[T]he reasons behind the recognition of the settlement privilege are the same regardless of the nature of the dispute.”[11]

The court drew no distinction between public or private disputes, finding that the principles of settlement privilege are equally important in both cases, and ultimately found that s. 27 mandated nondisclosure of the Remediation Agreement because it was privileged.

Significance

The SCC’s dismissal of leave to appeal the ABCA’s decision represents judicial endorsement of settlement privilege in the specific context of FOIPP requests. The decision indicates strong protection of privilege in Canada, even in the context of public regulatory bodies and FOIPP, where public policy considerations against privilege are more likely engaged.

Parties entering into settlement negotiations should take heart in the judiciary’s protection of their private information, but should take certain precautions; parties should clearly state their intention that information exchanged is privileged and confidential, as the s. 16 exception to disclosure requires that the information be supplied, either implicitly or explicitly, in confidence. In a broader context, the decision demonstrates the type of statutory interpretation in which courts will engage where confidentiality or privilege provisions apply.