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CIVIL EVIDENCE - Documentary evidence - Sealed evidence

Monday, January 14, 2019 @ 10:37 AM  

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Application by the defendant PacNet Services Ltd. (PacNet) and the Day Defendants for a sealing of the entire court file. The Director of Civil Forfeiture (Director) alleged that the defendants had at best benefited from, or at worst been complicit in, various fraudulent direct mail schemes perpetrated by certain PacNet clients. The Director was seeking forfeiture of real property and bank account balances held by the defendants as proceeds of unlawful activities or instruments of unlawful activities. PacNet had faced many court proceedings in various jurisdictions arising from the fraudulent activities of some of its clients. However, PacNet and its principals had never been indicted, charged, or prosecuted with any criminal offences with respect to PacNet’s business activities in any jurisdiction. The defendants contended that sealing the entire court file from public access was necessary to allow them the opportunity to fairly defend and refute the serious allegations advanced by the Director in this proceeding. They submitted that sealing the entire court file was necessary to protect various witnesses from further adverse consequences, to protect the confidential information of third parties from public disclosure, and to avoid the compelled production of evidence that may be shared with other law enforcement agencies, which was said to violate the defendants’ rights under the Charter, including their right against self-incrimination. The Director was opposed to the sweeping nature of the relief sought. However, he took no position with respect to some protection for potential third party witnesses and some protection, assuming a proper evidentiary basis, in relation to third party privacy interests.

HELD: Application allowed in part. There was considerable public interest in these proceedings. The Director was a public body fulfilling a public function in pursuing these types of cases. It was appropriate to grant some protection to six affiants in terms of their identity as might be disclosed in the court file. However, a complete sealing of the court file was an entirely disproportionate response to the defendants’ concerns. Protections could be put in place with minimal limitations on the open court principle, by simply referring to the witnesses by their initials or by numbers. In addition, the affidavits of the six persons were to be filed under seal and were to be accessed only by the parties to the action and their counsel or pursuant to further court order. With respect to the confidential information of third parties, PacNet failed to establish that it was faced with the dilemma of having to choose between breaking clear confidentiality agreements and not relying on relevant documentation to present its case. It was entirely speculative that any lists of PacNet clients or information provided by those clients would ever be adduced in affidavits to be filed in these proceedings. Furthermore, the defendants failed to prove that there was any real and substantial or serious risk to an important interest, namely self-incrimination. Even if such a risk did exist, a sealing order was not necessary to address that risk as other reasonable alternative measures existed.

British Columbia (Director of Civil Forfeiture) v. PacNet Services Ltd., [2018] B.C.J. No. 3720, British Columbia Supreme Court, S.C. Fitzpatrick J., November 23, 2018. Digest No. TLD-January142019003