The Alberta Securities Commission ("ASC") was a creditor of Mr. Rene Joseph Branconnier. The ASC had found that Mr. Branconnier had breached Alberta's Securities Act and ordered him to pay $415,000 in administrative penalties and costs.
On July 15, 2016 Mr. Branconnier attended an examination in aid of execution (the "Examination"). The ASC then filed an application to examine Mrs. Sharon Faye Branconnier, pursuant to Rule 13-4(2) of the Supreme Court Civil Rules. The application materials included portions of the transcript of the Examination.
Mr. Branconnier subsequently filed a proposal under s. 62 of the Bankruptcy and Insolvency Act (the "BIA"). As Mr. Branconnier filed for bankruptcy, the ASC sought to examine Mrs. Branconnier pursuant to section 163(2) of the BIA, which allows a creditor or interested person to apply to the court for order to examine the bankrupt or any other person. The application again included portions of the transcript from the Examination.
In response to the application, Mrs. Branconnier argued that the implied undertaking rule, which implies an undertaking on all parties engaged in civil litigation to only use materials obtained in a litigation for the specific action in issue, had been violated. Mrs. Branconnier asserted that the ASC had failed to obtain a court order waiving the application of the implied undertaking related to the transcript. The ASC argued that the implied undertaking should be waived.
Decision
The Honourable Justice Voith held that the implied undertaking of confidentiality applied to evidence and documents obtained at an Examination. On the issue of whether that implied undertaking should be waived, the Court reviewed the law and noted that in order for the implied undertaking to be waived, an applicant, such as the ASC, must the existence of a public interest of greater weight than the values the implied undertaking is designed to protect, namely privacy and the efficient conduct of civil litigation. In this case, Justice Voith was satisfied that the interests of justice outweighed any prejudice that would result to Mr. Branconnier from the waiver of the implied undertaking.
Justice Voith noted that both Rule 13-4(5) and s. 163(2) of the BIA provide a creditor with the ability to apply to examine a third party who may have information about, in the one case, the assets of the judgment debtor or, in the other case, the administration of the estate of the bankrupt. Justice Voith went on to find that the interests of justice were served by granting the ASC leave to use the transcript for its s. 163(2) of the BIA application. Accordingly, Mrs. Branconnier was ordered to attend an examination and produce all non-privileged documents that were in her possession or control.
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