Executive Summary: Key Legal and Evidentiary Issues

• GEREC sought to use discovery materials in a new Quebec proceeding, raising questions about the scope and termination of the implied undertaking rule.

• The Court clarified that in Federal Court, the implied undertaking ends once documents are filed publicly, including during interlocutory motions—not just at trial.

• GEREC argued that the contested information was already public or originally in its possession and thus outside the rule’s reach.

• Canmec and Rio Tinto contested the use of the information, claiming it remained protected and that GEREC breached confidentiality.

• The Court found no breach of the rule or of the Protective Order, emphasizing that preparing a motion for relief does not violate these obligations.

• As a precaution, the Court granted GEREC relief from the implied undertaking to pursue its claim in the Superior Court of Québec.

Facts of the case

The dispute originated from a refurbishment project at the Isle-Maligne hydroelectric power plant owned by Rio Tinto Alcan Inc. GE Renewable Energy Canada Inc. (GEREC) was involved in pilot refurbishments of Units 1 and 2, during which it shared proprietary engineering drawings and documents—termed the "GEREC Works"—with Rio Tinto. These included technical specifications for butterfly valves and associated components.

GEREC later discovered that its materials had been used by Canmec Industrial Inc. during refurbishment work on Units 3 to 12. It alleged that this unauthorized use constituted copyright infringement and that Rio Tinto had breached contractual obligations by sharing GEREC's proprietary documents with Canmec. GEREC initially tried to amend its statement of claim in Federal Court to add new allegations concerning over 500 additional documents. This motion was denied in a 2024 decision (GEREC II), and the denial was upheld on appeal.

Subsequently, GEREC drafted a new claim for the Superior Court of Québec, relying in part on discovery information from the Federal Court action. To avoid violating the implied undertaking rule, which restricts the use of discovery information for purposes outside the original litigation, GEREC brought a motion asking the Federal Court to declare that the information was no longer protected or to grant leave to use it in the Quebec action.

Legal analysis and court findings

Implied undertaking rule

At the heart of the motion was whether the implied undertaking rule still applied to information GEREC intended to use. The Court analyzed the common law doctrine, emphasizing that the rule protects privacy by restricting the use of discovery information to the original litigation. However, it also highlighted the doctrine's limitations, notably that it does not apply to information already on the public record.

Justice McHaffie concluded that the rule ends when documents or information are filed in open court—even if done so during interlocutory motions. This interpretation aligned with prior Federal Court jurisprudence and reflected the open court principle, which supports transparency in judicial proceedings.

GEREC's conduct and relief sought

The Court rejected arguments from Rio Tinto and Canmec that GEREC violated the implied undertaking simply by preparing its Draft Claim or motion. Justice McHaffie emphasized that a party must be able to assess and seek relief from the rule without penalty. Furthermore, the Court found that the key information cited in the Draft Claim had already been publicly disclosed during GEREC's previous motion to amend pleadings, or was originally in GEREC’s possession.

Even if some information remained protected, the Court found it appropriate to grant relief. The allegations in the proposed Quebec action were closely related to those in the Federal Court litigation and involved the same parties and factual context. The Court held that there was minimal prejudice to Canmec and Rio Tinto, and allowing GEREC to pursue its claims in a new forum was in the interest of justice.

Final outcome

The Court ruled that the information GEREC wished to use in its Quebec proceeding was no longer protected by the implied undertaking rule, as it had already entered the public record. Nevertheless, to eliminate any ambiguity, the Court granted GEREC leave to use the specified discovery information in the new action. The motion was allowed, and GEREC was awarded fixed costs: $5,000 from Canmec and $6,000 from Rio Tinto.