Case of the Day: Third Point LLC v. Fenwick

H/T to Antonin I. Pribetic for bringing to light the case of the day, Third Point LLC v. Fenwick, 2011 ONSC 2068, an Ontario case on a letter rogatory from the New Jersey Superior Court seeking a summons for a deposition in Ontario. Canada is not a party to the Hague Evidence Convention, which is why resort to a letter rogatory was necessary.

The Ontario case does not spell out the facts of the underlying case in detail, but in short, Fenwick (who was not a party to the New Jersey case) was a securities analyst employed by Cormark Securities. He was the author or co-author of a document on Fairfax Financial Holdings Ltd., one of the companies he covered, which councluded that “Fairfax was likely to perform with its peer group.” The plaintiffs in the New Jersey case alleged that the defendants there “did their best to dissseminate false information so that they could profit when the price of the shares of Fairfax declined.” The plaintiffs claimed reputational damage. The defendants sought to depose Fenwick, because they believed that his analysis was inconsistent with Fairfax’s claims.

After referring to the relevant statutes (the Canada Evidence Act and the Ontario Evidence Act) and the general principles that the court has power to enforce a letter of request, that it will do so when possible for reasons of comity, and that the court will not enforce a letter of request if “contrary to public policy or otherwise prejudicial to the sovereignty or the citizens of Canada,” the court identified six relevant factors: (1) relevance of the evidence; (2) necessity of the evidence for trial; (3) whether the evidence is otherwise available; (4) public policy; and  (5) undue burden. Fortunately (from the perspective of U.S. lawyers if not of Canadian witnesses), the court held that it could grant the application even if the evidence was sought in the course of pre-trial discovery and not for use at trial. Even if the factors are satisfied, the court has discretion to deny to execute the letter rogatory or to limit its scope.

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