Chief Building Officials and other municipal officials who have experience before Ontario's civil courts may be familiar with the Deemed Undertaking Rule. Contained in Ontario's Rules of Civil Procedure,1 the Rule provides that, "all parties and their lawyers are deemed to undertake not to use evidence or information to which the Rule applies for any purposes other than those of the proceeding in which the evidence was obtained". This means that evidence or information which becomes known in the course of the proceeding may not be used in any other proceeding, unless an exception applies. Understanding the reach of the Rule is important for municipal officials who are tasked with applying and enforcing any number of by-laws and provincial statutes.
Consider, for instance, a situation where a municipality is defending a civil action in which a plaintiff business owner alleges that the municipality failed to maintain roadways in its jurisdiction in a fit and proper repair, which is contrary to the Municipal Act, 2001. In the course of attending at examinations for discovery, the municipality comes to learn that the plaintiff has been operating a business in the municipality in contravention of a municipal by-law and an Ontario statute. This places the municipality in a conflicted position vis-a-vis the Rule. On the one hand, the municipality is bound by the Rule not to use information in any proceeding, other than the one in which it was obtained. While on the other, it may have a duty to take positive steps regarding the ongoing breach that has come to light as a result of attending at examination for discovery. In the event that the municipality decides to forge ahead and use the information in a separate action against the business owner, then it runs a very real risk of breaching the Rule. The consequences of this breach may include improper disclosure and a frustration of the judicial procedure, not to mention a prohibition on the use of the information and/or a dismissal of any action or proceeding brought by it against the business owner in connection with the illegal business.2
From a risk mitigation perspective, the municipality should consider whether it may possibly achieve its objective without having to rely on the information obtained in examination for discovery. If not, the municipality would then need to explore whether an exception to the Rule, if any, may permit it to make use of the information in the unrelated proceeding. This article will now consider the three most likely exceptions to be used by a municipality seeking relief from the Rule.
Consent to Use
The first exception involves obtaining the consent of the party who disclosed the information.3 If we turn back to our earlier example, this would likely involve writing the plaintiff's lawyer requesting the client's consent for the municipality to use the relevant information obtained in the highway matter. Generally speaking, obtaining the other party's consent to use the information will be the quickest and most cost-efficient way to set aside application of the Rule.
Filing or use in court
The second exception reflects the principle that the deemed undertaking ceases to apply once evidence is either given (in a court hearing) or filed with the court. Once the deemed undertaking has ceased to apply, the relevant evidence or information could be used for a purpose other than for which it was originally given.4 Two separate practical issues arise for the municipality when considering this exception. The first is whether it is reasonable under the circumstances for the municipality to wait for the information to become public before taking action. Consider, for instance, a situation where there is an ongoing safety risk to the public. If that is the case, it may not be sensible for the municipality to wait until the information becomes part of the court's record before taking the appropriate legal steps. The second issue is the risk that the matter could be settled out of court without the information being filed. If that happened, then the municipality would have lost a great deal of time, which may negatively impact the other action.5
The third exception involves seeking an order of the court to have the Rule waived or set aside. From a practical perspective, recourse to the courts can be the municipality's starting point or the next logical step where there has been a breakdown in consent discussions with the party that disclosed the information. The Court of Appeal said in Goodman6 that some injustice to the party (protected by the Rule) would be tolerated if it is outweighed by a greater injustice to the party seeking to make use of the discovered documents.7 Although bringing a court action would allow the municipality to control the process, the costs of doing so suggest that most will weigh the issues at hand before rushing to their local courthouse.
1Rules of Civil Procedure, R.R.O 1990, Reg 194.
2Trimble, Jamie.The Deemed and Implied Undertaking – Its Limited Reach", Civil Litigation Updated 2007, County of Carleton Law Association at page 11.
4Watson Q.C., Garry D, "Ontario Civil Practice 2012" Carswell at page 815.
5Consider for instance whether the municipality's action may become time barred pursuant to the Limitations Act, 2002.
6Goodman v. Rossi (1995), 24 O.R. (3d) 359
7Ibid Watson at page 817.