Summary

40656

Continental Currency Exchange Canada Inc., et al. v. Eric Sprott, et al.

(Ontario) (Civil) (By Leave)

Keywords

Civil procedure — Abuse of process — Stay — Privileged documents — What legal test applies on a motion arising from the inadvertent retention of privileged documents by former business partners — When should access to privileged information result in a stay of proceedings?

Summary

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The parties spent many years and millions of dollars on a joint venture to establish a new Schedule 1 bank. However, in January 2015, when the respondent Eric Sprott advised that he no longer wished to participate in funding the project, relations among the parties deteriorated and litigation was commenced. The applicants sued the respondents for breach of contract. Several years after the actions were commenced, the respondents discovered that the applicants were in possession of privileged documents belonging to them regarding the venture at issue in the ongoing litigation that had been stored on a computer file server that they had shared. The respondents also learned that the applicants had obtained copies of their email correspondence.

The respondents brought a motion to stay the proceedings as an abuse of process. The motion judge found that the applicants had access to privileged documents including legal opinions and strategy documents prepared for the respondents and every email sent or received by anyone from the respondent Continental Bank of Canada’s email address including emails from in-house counsel and documents prepared for purposes of the litigation. The applicants led no evidence to refute the presumed prejudice that arose from these findings. The motion judge held that the presumed prejudice to the respondents was serious and the only appropriate remedy was to stay the proceeding. The applicants’ appeal was dismissed.

Lower Court Rulings

January 28, 2022
Ontario Superior Court of Justice

2022 ONSC 647, CV-16-11306-00CL, CV-17-11661-00CL
Respondents’ motion to stay applicants’ claims granted
January 27, 2023
Court of Appeal for Ontario

2023 ONCA 61, C70412
Appeal dismissed.