On August 5, 2014, the Alberta Court of Appeal released a decision that may expand corporate litigants’ document production obligations. In Dow Chemical Canada ULC v. Nova Chemicals Corp. (Dow Chemical), the Court of Appeal held that records that were in the possession of the plaintiffs’ parent corporation should be considered to be within the plaintiffs’ control, and thus subject to production in their affidavit of records if relevant and material, on the basis the documents related to the plaintiffs’ business.
OBLIGATION TO PRODUCE DOCUMENTS IN A LITIGATION
Rule 5.6 of the Alberta Rules of Court obliges parties to produce affidavits of records disclosing all records that are relevant and material to the litigation, and are or have been within their control. The court may compel a non-party to produce records in a litigation under Rule 5.13 of the Alberta Rules of Court if one of the parties establishes that the non-party controls records that are relevant and material to the litigation and may be required to produce those records at trial.
FACTS OF THE CASE
Dow Chemical Canada ULC (Dow Canada) and Dow Europe GmbH (Dow Europe) (collectively, the Dow Plaintiffs) alleged that Nova Chemicals Corporation (Nova) had misappropriated the Dow Plaintiffs’ ethylene and had failed to optimize production at a jointly owned ethylene plant. Nova applied for an order compelling the Dow Plaintiffs to produce certain documents related to ethylene production at facilities owned by The Dow Chemical Company (TDCC) (TDCC Documents) on the basis that the TDCC Documents were relevant to the calculation of damages. TDCC, which is the parent of Dow Canada and Dow Europe, was not a party to this litigation.
MOTION JUDGE’S DECISION
The motion judge, Chief Justice Neil Wittmann of the Court of Queen’s Bench of Alberta, analyzed Nova’s application as an application to compel a non-party to produce documents. Chief Justice Wittmann found that the TDCC Documents were not relevant and material to the litigation, and therefore dismissed Nova’s application.
COURT OF APPEAL’S DECISION
The Court of Appeal agreed with Chief Justice Wittmann that the TDCC Documents were not relevant and material to the litigation, and therefore need not be produced. However, the Court of Appeal did not approach Nova’s application as an application to compel a non-party to produce documents. Instead, the Court of Appeal found that the Dow Plaintiffs had control of the TDCC Documents and therefore would have been obligated to produce them in their affidavit of records if they were material and relevant.
The Court of Appeal’s analysis on the issue of control of the TDCC Documents appears to depart from the definition of “control” it adopted in its 2012 decision McAllister v. Calgary (City) (McAllister). In McAllister, the Court of Appeal held that a party controls a document if the party has “a legal right to access the record or to get copies of it from the non-party” (paras. 6, 7). Instead of considering whether the Dow Plaintiffs had a legal right to access the TDCC Documents or to get copies of them from TDCC, the Court of Appeal held that “records relating to production decisions at the plaintiffs’ facilities should be treated as documents under their control, no matter who has possession of them.” The Court of Appeal did not comment on McAllister or on Rule 5.3 generally other than to note that a litigant should not be permitted to avoid its document production obligations by “putting the management of its business in the hands of a third party.”
While the Court of Appeal’s comments on control of the TDCC Documents were obiter dicta, they are nevertheless significant; the Court of Appeal appears to have adopted a broader view of who may be said to control a record. Given the brevity of the Court of Appeal’s analysis on this point, it is not yet clear how this decision will be interpreted by lower courts. However, litigants should be aware that document production obligations in Alberta may now extend beyond records that a party has a legal right to access, particularly in respect of documents in the possession of related corporate entities.