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Norwich Orders: Getting Behind the Mask

The abridged version of this article was originally published on October 31, 2019 by The Lawyer’s Daily, part of Lexis Nexis Canada Inc.

Introduction

Technology has both lessened and increased people’s ability to stay anonymous in society. Sometimes that anonymity has necessitated the application of old legal and equitable doctrines to new legal problems.

For example, commentary on the internet is frequently made anonymously using pseudonyms so that the true author’s identity remains unknown. Likewise, many social media applications permit users a degree of anonymity in the manner in which identifying information is disclosed, and to whom. The Supreme Court of Canada has equated anonymity with informational privacy, which is particularly important in the context of Internet usage.1

But should privacy interests surrounding Internet usage yield to disclosure of the identity of wrongdoers? Relatedly, should people be able to use the Internet with impunity to hurt others?2

While in many situations, Internet anonymity may be a good thing (e.g. fostering freedom of speech), anonymity can also be employed to more nefarious ends, including defamation,3 cyberbullying,4copyright infringement,5 and, of course, fraud.6And, while the fact that a person has been wronged may be readily apparent, the identity of the wrongdoer(s) may be unknown or in the exclusive knowledge of a third-party mixed up in the wrongdoing, such as a service provider.

This is where the equitable Norwich order comes in.

Norwich Orders

Norwich orders have their genesis in equity.7Broadly stated, they entail the freestanding right to bring an action for discovery against an innocent third-party inadvertently mixed up in some wrongdoing. They are typically, but not always brought pre-action.8

Authority for modern Norwich orders is frequently traced back to the 1974 House of Lords decision of Norwich Pharmacal Co. v. Commissioners of Customs & Excise,9from which the remedy derives its name. In that case, the House of Lords permitted an American drug company to use a pre-action bill of discovery to obtain the identity of a party secretly importing the company’s patent-protected drug from the English customs authorities so that the importer could be sued for patent infringement. As the House of Lords held: “[I]f through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their-wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers.”

When faced with a motion for a Norwich order, Canadian courts typically apply a four-part test:

  1. Has the moving party shown a valid, bona fide or reasonable claim?
  2. Has the moving party shown that the third-party from whom information is sought is somehow involved in the acts complained of beyond a mere witness?
  3. Is the third-party the only practicable source of the information? and
  4. Do the interests of justice favour the obtaining of disclosure from the third-party?10

In defamation cases, Norwich orders may be employed against internet service providers to obtain IP addresses and other information necessary to identify an anonymous wrongdoer.11 For example, a Norwich order might be made to identify a competitor purposely posting false reviews about a competing business to destroy its reputation and market share. Such a remedy may be equally applicable in the case of cyberbullying through social media.

However, in addition to identifying wrongdoers, Norwich orders may be used to evaluate whether a cause of action even exists, to trace and preserve property or evidence,12 and even to obtain exculpatory evidence.13 Indeed, Norwich relief has been given such an expansive approach in English jurisprudence that it may apply to novel situations in which the doctrine has never been used.14

Norwich relief is also readily available where a plaintiff has been defrauded and seeks production of bank records to prove the fraud and recover stolen property.15 In such a case, the court has held that the innocent third party bank is involved because without the bank’s involvement, the wrongful receipt and possible transfer of funds could not have occurred.16 In fraud cases involving cryptocurrency, Norwich orders may be useful in both unmasking the true identity of a fraudster and tracing bitcoin across traditional jurisdictional boundaries, possibly in conjunction with the assistance of foreign courts.17

Indeed, one judge has commented that “[w]here the applicant believes it is the victim of fraud, it is unreasonable to require the applicant to approach the alleged wrongdoer for the information, and the various financial institutions become the only practicable source of the information.”18

In fraud cases, Norwich orders may be combined with other remedies, including Mareva injunctions (the subject of an upcoming blog), and sealing orders, often on an ex parte basis (without notice to the wrongdoer). For example, a Norwich order could be used to locate funds held in a bank account, followed by a Mareva injunction to freeze those funds pending trial, and the execution of an Anton Pillar order to seize evidence at risk of being destroyed by a fraudster.

There is no doubt that Norwich orders remain powerful equitable remedies. As technological innovation continues to change society, creative litigants and their counsel will employ them in situations in which they have never been used before.

Footnotes
  1.   R. v. Spencer, 2014 SCC 43.
     
  2.   York University v. Bell Canada Enterprises, 2009 CanLII 46447 (ON SC) at para. 1.
     
  3.   See for example Rutman v. Rabinowitz, 2018 ONCA 80;
     
  4.   See for example A.B. v. Bragg Communications Inc., (2012) 2 S.C.R. 567.
     
  5.   See for example Rogers Communications Inc. v. Voltage Pictures, LLC, (2018) 2 S.C.R. 643; Google Inc. v. Equustek Solutions Inc., (2017) 1 S.C.R. 824.
     
  6.   See for example R. v. Aghayere, 2016 ONCA 54.
     
  7.   The jurisdiction of Ontario courts to grant equitable relief is grounded in s. 96(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43: “Courts shall administer concurrently all rules of equity and the common law.”
     
  8.   In Ontario, Rules 30.10 and 31.10 apply to discovery of third-parties after an action is already commenced. These rules co-exist with the Norwich order, which doctrinally predates them: Straka v. Humber River Regional Hospital, (2000) O.J. No. 4212 (C.A.).
     
  9.   Norwich Pharmacal Co. v. Commissioners of Customs & Excise, (1974) A.C. 133 (H.L.) at p. 175. This case “resurrected” the free-standing right to discovery in equity.
     
  10.   Isofoton S.A. v. Toronto Dominion Bank (c.o.b TD Canada Trust), (2007) O.J. No. 1701 at para. 40; GEA Group AG v. Ventra Group Co., (2008) O.J. No. 5417 at para. 49.
     
  11.   York University v. Bell Canada Enterprises, 2009 CanLII 46447 (ON SC).
     
  12.   Bergmanis v. Diamond, 2012 ONSC 5762 at para. 36.
     
  13.   R. v. Secretary of State for Foreign and Commonwealth Affairs, (2008) E.W.H.C. 2048 (Admin) (Div. Ct.).
     
  14.   Ashworth Hospital Authority v. MGN Ltd., (2002) 4 All E.R. 193, (2002) UKHL 29 (H.L.) at para. 57: “New situations are inevitably going to arise where it will be appropriate for the jurisdiction to be exercised where it has not been exercised previously. The limits which applied to its use in its infancy should not be allowed to stultify its use now that is has become a valuable and mature remedy.”
     
  15.   Isofoton S.A. v. Toronto Dominion Bank (c.o.b. TD Canada Trust), (2007) O.J. No. 1701 at para. 34.
     
  16.   Isofoton S.A. v. Toronto Dominion Bank (c.o.b. TD Canada Trust), (2007) O.J. No. 1701 at paras. 49-50.
     
  17.   An interesting article on this topic by Eric S. Rein entitled Challenges in Discovering Perpetrators of International Cryptocurrency Frauds can be found here: https://www.americanbar.org/groups/litigation/committees/commercial-business/practice/2018/challenges-discovering-perps-international-cryptocurrency-fraud/
     
  18.   Isofoton S.A. v. Toronto Dominion Bank (c.o.b. TD Canada Trust), (2007) O.J. No. 1701 at para. 52.
     

Matthew Stroh

Matthew is a senior member of the estate and litigation groups. He maintains a broad civil, commercial, insurance and securities litigation practice.

This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
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