Legal Blog

Norwich Order (2)

Does an aggrieved party have any recourse when it suspects that it has been wronged, but needs information from a third party to either confirm or allay its suspicions? Under the right circumstances, the creditor can obtain a Norwich order, named after the plaintiff in a 1974 English case.

We first discussed this concept in a February 2009 newsletter discussing Isofoton v. TD Canada Trust, a 2007 decision of the Ontario Superior Court of Justice. Until the Isofoton decision, in Canada there had been a 2002 Alberta decision and that was about it. In our newsletter, we noted that the Norwich order remedy had not been used extensively in Ontario or Canada but suspected that it would have far more use because of the Isofoton decision. We were not wrong. In the past 18 years, the Isofoton decision has been cited seventy times in reported cases and articles and, in 2018, the Supreme Court of Canada examined and applied the concept.

We have used this remedy extensively while acting for a creditor when we suspect that a judgment debtor has fraudulently transferred assets to a third party and we need information from the judgment debtor’s financial institution to determine whether the requested information supports our suspicion. If the information does, we commence a fraudulent conveyance or trust action.

The latest case to deal with a Norwich order is Taylor v. Metrolinx 2024 ONSC 4774, a decision of the Ontario Superior Court of Justice.

Complaint

The complainant worked for a general contractor. Metrolinx had retained the general contractor to perform work on one of its projects. At some point during the project, senior executives of Metrolinx received an email from an individual alleging that the complainant had engaged in various criminal activities, including racketeering, fraud, and embezzlement against the general contractor. The writer noted that he (or she) did not wish to be associated with an investigation and feared retaliation from the complainant.

Metrolinx provided the email to the general contractor and redacted it to ensure that the identity of the writer was not known. The general contractor retained an independent lawyer to investigate. During the investigation, the independent lawyer provided the redacted email to the complainant. Ultimately, the general contractor terminated the complainant.

The complainant, who maintained his innocence, intended to commence an action against the email writer asserting various tortious causes of action, but first needed to know the writer’s identity. Metrolinx refused to divulge that identity. It cited its confidentiality and privacy policy and the writer’s refusal to consent to Metrolinx divulging his identity.

The complainant then brought an application for the equitable remedy of a Norwich order to force Metrolinx to provide the writer’s unredacted email.

Legal Test

The requirements for a Norwich order follow:

• The applicant must have a bona fide claim against the alleged wrongdoer.
• The person from whom discovery is sought must in some way be involved in the matter under dispute rather than being a mere innocent bystander.
• That person must also be the only practical source of information available to the applicant.
• That person must be reasonably compensated for all its expenses arising out of compliance with a Norwich order – in addition to its legal costs.
• The public interest in favour of disclosure must outweigh legitimate privacy concerns.

In Taylor, the 2nd, 3rd, and 4th requirements were not in issue. Metrolinx admitted they were met.

Bona Fide Claim

Metrolinx filed an affidavit from an officer of the general contractor. The affiant stated that the general contractor did not terminate the complainant because of the email; rather, it terminated the complainant because of the information that arose from the investigation and the complainant’s activities during the investigation.

The complainant’s contemplated actions included defamation, damages for intentional infliction of mental distress, and injurious falsehood. The judge noted that, regardless of the reasons that the general contractor terminated the complainant, if the allegations contained in the email were baseless, it would not be difficult to show that the writer made them with the intention to cause harm to the complainant.

The judge held that the evidence of the affiant cast doubt on the strength of the complainant’s proposed claims but that the complainant had presented sufficient bona fides to lift the proposed litigation beyond the realm of being frivolous or wholly lacking in merit. It was not necessary for the complainant to present a prima facie case.

Public Interest

Metrolinx asserted that confidential source privilege protected the writer’s identity. However, for the privilege to be effective, Metrolinx had to establish that:

• the communication originated in a confidence that the writer’s identity would not be disclosed;
• the confidence had to be essential to the relationship in which the communication arose;
• the relationship was one that should be sedulously fostered in the public interest; and
• the public interest, served by protecting the identity of the writer, outweighed the public interest in getting at the truth.

Metrolinx referred to the wording of the email, which specifically requested that Metrolinx not reveal the writer’s identity, and the fact that, when subsequently asked for permission to reveal the writer’s identity, the writer refused. Metrolinx had also relied on its confidentiality and privacy policy, but that policy was a double-edged sword. Metrolinx posted the policy on the website; the policy stated that:

• by submitting personal information, the writer gives Metrolinx consent to “collect, use and disclose your personal information” in accordance with the policy;
• Metrolinx had the right to use personal information “for purposes that include responding to comments or complaints, or to detect and prevent fraud, theft and other illegal activities;” and
• Metrolinx could provide personal information to third parties “who have a need to know the information for one of the purposes described above,” including “where disclosure is required or permitted by law or pursuant to a court order.”

The judge held that the policy (i) was broadly worded, signalling that one’s personal information is in the hands of Metrolinx and that the writer consents to its use in accordance with the terms of the policy and relinquished control over it, and (ii) was not specifically designed to create a process that allowed complaints to be made anonymously. The judge further held that even if the policy did not exist, the writer had sent an unsolicited email to complete strangers with whom he had no prior relationship on which to base any real expectation that his personal details would be kept in confidence.

The judge noted that there is a public interest in having civil claims correctly disposed of on the merits and a further public interest in not allowing individuals to hide behind anonymity when making malicious and unfounded comments about others. Accordingly, the judge held that the email did not originate in confidence and that, in itself, meant that she decided that the public interest weighed in favour of disclosure.

Costs

The complainant, as the successful party, claimed its partial indemnity costs of $13,000. Metrolinx claimed its own partial indemnity costs of $5,300. The judge relied on a line of precedents as authority for awarding costs to Metrolinx even though it lost the application. Although Metrolinx could have taken no position on the application, the judge held that it was reasonable for Metrolinx to oppose the order when the writer had asked that it do so. The court also noted that Metrolinx had conceded three of the five Norwich factors and its requested costs were quite reasonable. The judge ordered costs of $5,000 in Metrolinx’s favour.

 

Image courtesy of  lucasgeorgewendt.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.