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Carrier Fares and Anton Piller Orders
Published in the February 2008 issue of Transportation Notes - View Article
In NAC Air, LP v. Wasaya Airways Limited Partnership, the Superior Court set aside an Anton Piller order granted against Wasaya Airways for being overly broad and unjustified. An Anton Piller order is a special order granted in rare circumstances that amounts to a “civil search warrant”. It can be obtained by a plaintiff in a civil suit on a motion without notice to the defendant. It compels the defendant to allow a search party to enter its premises and seize evidence. The purpose of the order is to preserve evidence for the law suit. However, to obtain such an order, the plaintiff must make a very strong prima facie case of actual or potential damage caused by the defendant’s misconduct. It must also establish on that basis that the defendant has in its possession incriminating documents or things and that there is a real possibility that the defendant will destroy this evidence before discovery. Such an order should usually be subject to several conditions, including that the plaintiff be obliged to pay damages if the order is wrongfully executed, that the scope of the order be as narrow as possible, that a mechanism for preserving confidential documents from review be set out, and that materials seized be returned to the defendant as soon as practicable.
In this case, the plaintiff, NAC and the defendant, Wasaya, are competitor airlines servicing remote areas of North-western Ontario. In March 2007, NAC began noticing that the number of employees of a government department, Health Canada, using its services was declining significantly. In order to stay competitive, NAC had a policy of adjusting its fares monthly and gave Health Canada employees access to these fares through a password-protected area on its website. NAC became suspicious that Wasaya was undercutting its prices as a result of Health Canada employees advising Wasaya of its rates. While Health Canada assured NAC that this was not occurring, NAC noticed that Wasaya’s rates tended to move down in tandem with its own reductions. After monitoring its website, NAC came to the conclusion that its fares were being accessed by Wasaya.
NAC applied for an Anton Piller order on November 5, 2007, contending that Wasaya “would destroy electronic documents stored on their computers if they were aware of the court application.” On November 8, 2007, under the supervision of an independent solicitor, a fourteen-hour search was conducted and more than 800,000 documents were seized. These documents included private e-mails, individual banking records, income tax returns, personnel files and patients’ medical records. Documents subject to solicitor-client privilege were also seized.
The court was evidently appalled by the scope of the search and seizure, calling it “breathtaking”. Furthermore, the court found that the plaintiff had not satisfied the requirement that there was a real possibility that the defendant would destroy the evidence. The court rejected evidence put forward by the plaintiff on the risk of losing or overwriting files on a computer, emphasizing that the test was to show intentional destruction of evidence. Furthermore, the court was unimpressed with the plaintiff’s argument about urgency, noting that it could not explain why it waited from March to November to ask for the order if it suspected electronic spying. Furthermore, the court underlined that the alleged misconduct by a defendant that serves as the basis for the claim against it cannot be confused with the probability that the defendant will destroy the evidence.
The court also pointed out that the execution of the order was overbroad and indiscriminate. This was amply demonstrated by the range of personal and business documents caught, including aircraft leases, business plans, banking facility agreements, aircraft financing documents, aircraft maintenance reports and Transport Canada inspections, which were clearly irrelevant to the allegations against the defendant. The court concluded that the scope of the search demonstrated “that the plaintiffs used the authority of the Anton Piller order to effectively seize all of its competitor’s records.”
The order was therefore set aside. The court ordered that all documents be returned to the defendant forthwith. All parties to the litigation were ordered to preserve documents relevant to the litigation and to abide by the regular rules applying to production.
NAC Air, LP v. Wasaya Airways,
[2007] O.J. No. 4618