BCSC must turn over certain documents

However, the adjudicator in the case found that although the BCSC proved that litigation privilege applied to some of the records — and that they could be withheld as a result — privilege doesn’t apply to most of the records; so, they could not be withheld.

The applicant was seeking access to all correspondence by email, telephone, conversation notes, etc., between the BCSC and various other authorities, including the Investment Industry Regulatory Organization of Canada (IIROC), both within Canada and/or internationally. But the BCSC refused to disclose the requested information on the basis that disclosure would harm a law enforcement matter. The anonymous applicant then asked the OIPC to review the BCSC’s decision.

There are 567 records that the BCSC withheld. The OIPC decision states the BCSC argued that litigation privilege applies to all of the records in dispute and that legal advice privilege also applies to five of the records, which were emails between the BCSC and Ontario Securities Commission (OSC) staff. The applicant argued that neither type of privilege applies.

The OIPC ruled that the BCSC did not establish that the emails with the OSC qualified as confidential communications between the BCSC and its lawyer. As a result, they are not subject to legal advice privilege.

However, unlike legal advice privilege, litigation privilege applies only in the context of litigation itself; once the litigation has concluded, the privilege ends, the decision explains. The OIPC decision says the BCSC argued that all of the records in dispute were created at a time when litigation was reasonably contemplated — after it has issued an investigation order.

Although the OIPC sided with the BCSC in finding that the BCSC reasonably contemplated litigation once the case had been referred for a more in-depth investigation, the OIPC said that determining the dominant purpose for the creation of each record is a much more challenging issue in this case. The applicant in the case argued that the dominant purpose for creating the records was investigation, not litigation. The BCSC argued that the dominant purpose was to prepare for litigation.

Ultimately, the OIPC ruled that “only a small portion of the records were created for the dominant purpose of litigation,” noting that most of the disputed records are email communications between BCSC investigators and the investigators of other regulatory bodies, financial services institutions and individuals who were interviewed as part of the investigation.

“Based on my understanding of the content and context of the records, it is apparent that the majority were created for the dominant purpose of investigating and uncovering the facts of what took place,” the OIPC decision states. “They are about the practicalities of the [investigation], such as arranging meetings between investigators, scheduling witness interviews and sharing information with other regulatory bodies, and they do not even refer to the BCSC litigation. It is not evident to me that these records were created for the dominant purpose of the BCSC hearing litigation.”

Even though records were created after a notice of hearing was issued in the case, and litigation was already underway, this does not mean that the records themselves were created primarily for litigation, the OIPC decision says.

Thus, the OIPC concluded that only 23 of the disputed records qualified for litigation privilege and that the most of the remaining documents were created for investigating, communicating and co-operating with the investigations of other regulatory bodies. As a result, one of the elements of the test for litigation privilege has not been proven, so the documents may not be withheld, the OIPC ordered.

Litigation privilege continues to apply to those 23 records, the OIPC determined, because the applicant has indicated that there may be an appeal of the BCSC hearing panel decision that was handed down against the applicant in this case, and a sanctions hearing has yet to be held to determine any penalties in the case.

“In light of the fact that the sanctions portion of the BCSC hearing has not yet concluded, and an appeal cannot be ruled out at this point, I find that the litigation is not over. Therefore, litigation privilege still applies to these 23 records and BCSC may continue to withhold them,” the OIPC decision states.

The OIPC has ordered the BCSC to comply with its decision by April 10.