British Columbia joined a number of jurisdictions in extensively revisiting its Supreme Court Rules this past year. Prior to July 1, 2010, the disclosure obligations of a party to litigation in British Columbia were very broad. Those disclosure obligations have been narrowed by the new Rules, although by how much still remains unclear.
For the disclosure of documents, the British Columbia courts applied the long established test in Compagnie Financiere du Pacifique v. The Peruvian Guano Co. (1882), to the effect that a document must be produced if it may fairly lead the opposing party on a train of inquiry which would either advance that party’s case or potentially harm the opponent’s case.
Under the wording of the old Rules of Court in force prior to July 1, 2010, a party being examined for discovery could be asked questions about “any matter … relating to a matter in question in the Action” (Rule 27(20)), and a party receiving a Demand for Discovery of Documents had to disclose any documents “relating to every matter in question in the Action” (Rule 26(1)).
POST JULY 1, 2010 RULES
The new Supreme Court Rules contain significant changes in both form and substance. With respect to examinations for discovery and disclosure of documents, there are essentially two changes to note.
With disclosure of documents, the party’s initial obligation under Rule 71(1) is simply to list documents that either could be used by any party to prove or disprove a material fact or which the party intends to refer to at trial.
It is worth noting, however, that under Rule 71(11) a greater disclosure obligation can be triggered by a demand from an opposing party for specific documents or groups of documents. Due to a lack of authorities, it is not yet clear how courts will interpret this broader secondary disclosure obligation.
Overall, the new Rules seem to reflect the American experience of putting the onus on the party seeking disclosure to specify what documents are to be produced as opposed to the traditional English approach favoured in the past in British Columbia of putting the burden on the party giving disclosure.
With examinations for discovery, the scope of the examination has not expressly changed. However, Rule 72(1)(a) now places a 7 hour time limit on examinations for discovery of a party. As will be seen, the courts have treated this time limit as being of some significance.
JUDICIAL INTERPRETATION OF THE NEW SUPREME COURT RULES
The first decision of note was the decision of the Court of Appeal in Jones v. Donaghey (2011). In that case, the Plaintiff applied for an Order compelling one Defendant to attend for an independent psychiatric examination. The chambers judge granted the Application finding this Defendant’s mental condition was “an issue in the litigation” and “potentially relevant” to the case.
The Reasons for Judgment of Mr. Justice K. Smith make for fascinating reading. His Lordship started by noting that in the law of pleading, “issue” is a term with a specific meaning. His Lordship defined “issue” as being “a disputed fact the resolution of which will, without more, have legal consequences as between the parties to the dispute”. His Lordship went on to note that an issue can be equated to material or ultimate facts:
Accordingly, since the purpose of pleadings is to define the “issues” of material or ultimate fact as between the parties, whether a proposition of fact is “in issue” for purposes of Rule 76(1) must be determined from an examination of the pleadings . . .
“Relevant”, the term used by the chambers judge, belongs to the law of evidence.
The relationship between relevance and issues of material or ultimate fact was explained . . .
Relevance ... requires a determination of whether as a matter of human experience and logic the existence of “Fact A” makes the existence or non-existence of “Fact B” more probable than it would be without the existence of “Fact A”. If it does then “Fact A” is relevant to “Fact B”. As long as “Fact B” is itself a material fact in issue or is relevant to a material fact in issue in the litigation then “Fact A” is relevant and prima facie admissible.
. . .
Thus, a material fact is the ultimate fact, sometimes called “ultimate issue”, to the proof of which evidence is directed. It is the last in a series or progression of facts. It is the fact put “in issue” by the pleadings. Facts that tend to prove the fact in issue, or to prove another fact that tends to prove the fact in issue, are evidentiary or “relevant” facts. And, as Professor Thayer said at 197, “Issues are not taken upon evidential matter.”
Therefore, it is important to distinguish between evidentiary facts which give rise to questions of relevance and ultimate or material facts, which are “in issue”.
In considering Rule 71 (which governs the initial obligation to disclose documents), it refers to documents relating to “material facts”. This would seem to suggest that documents simply relating to “evidential” or “relevant” facts need not be produced. As “material facts” seem to be few and far between, the need to disclose is seemingly greatly reduced from what it was.
On the other hand, the traditional Peruvian Guano test made documents relating to “evidential” or “relevant” facts discloseable. The requirement in the old Rules, of course, was that the documents relate to a matter in question, not an “issue”.
Hence, it is arguable that the use of the loaded phrase “material fact” by the drafters of the new Rules was intended to significantly alter (and thereby limit) the duty to disclose documents. Given that Jones was only issued by the Court of Appeal in January of this year, we have no analysis yet as to whether this argument is right.
However, Mr. Justice N. Smith in the Supreme Court decision in More Marine Ltd. v. Shearwater Marine Ltd., (2011) has extensively commented upon the impact of the changes in the new Rules:
Under the former rules, the duty to disclose documents and the duty to answer questions on oral examination were therefore controlled by the same test for relevance. Under the new Rules, different tests apply, with the duty to answer questions on discovery being apparently broader than the duty to disclose documents.
Although that may appear to be an anomaly, there are at least two good reasons for the difference. One reason is that if the court is to be persuaded that the broader document discovery made possible by rule 71(14) is appropriate in a particular case, some evidence of the existence and potential relevance of those additional documents will be required. The examination for discovery is the most likely source of such evidence.
The new Rules recognize that application of a 19th century test to the vast quantity of paper and electronic documents produced and stored by 21st century technology had made document discovery an unduly onerous and costly task in many cases. Some reasonable limitations had become necessary and Rule 71(1) is intended to provide them.
The new Rules also impose limitations on oral examination for discovery, but do so through a different mechanism. Rule 72(2) now limits an examination for discovery to seven hours or to any longer period to which the person being examined consents. Although the test for relevance of a particular question or group of questions remains very broad, examining parties who ask too many questions about marginally relevant matters, who spend too much time pursuing unproductive trains of inquiry or who elicit too much evidence that will not be admissible at trial risk leaving themselves with insufficient time for obtaining more important evidence and admissions.
The court in More Marine is thus clearly confirming that document discovery is to be taken as intended by the drafters to be significantly narrowed.
It now appears that the drafters of the new Rules intended to lessen a party’s obligation to disclose documents in litigation in British Columbia for sound public policy reasons.
The one wild card is the inclusion of the secondary disclosure obligation set out in Rule 71(11). Much like in the United States, the onus is now on the party receiving disclosure to identify specific documents or groups of documents which it seeks production of before this obligation is triggered.
One possibility is that the courts will simply find that the similarity in wording between the old Rule 26 (1) and the new Rule 71(11) (documents that “relate to any or all matters in question in the Action” versus documents “relating to every matter in question”) justifies a broad disclosure along the lines of the old practice whenever the secondary obligation is triggered by the party receiving disclosure.
With examinations for discovery, the only change of note is the new time limit of seven hours. As this was apparently intended to have a “self-policing incentive”, there appears to be a clear desire on the part of the drafters to ensure that too much time is not spent on marginally relevant matters.
At the end of the day, parties to litigation in British Columbia are, after the changes to the Rules effective July 1, 2010, subject to less onerous oral and documentary discovery obligations.