Litigation with the Atlantic Canada Opportunities Agency (ACOA)

The Destruction of Documents by ACOA












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ACOA fails to make full and timely disclosure and then destroys documents after litigation commenced


























A brief for the Judge of the Supreme Court

click here to download the brief from February, 2009






The Atlantic Canada Opportunities Agency (ACOA) commenced a law suit against American investors from Louisiana on June 5, 2002.
 
ACOA finally filed its first List of Documents in May, 2008.
 
According to the common law and the rules of court, the Plaintiff and its lawyers must immediately secure all documents and evidence with a semblance of relevance to the law suit. A list of these documents is to be filed within a short time after the law suit starts.
 
The relationship between ACOA and the Americans started in January, 1997, if not earlier, and included 3 applications to the Business Development Program, coverd business plans for projects worth millions of dollars, and included 15 months of back and forth negotiation that finally resulted in a June, 1998 offer from ACOA for a scaled-back project.
 
In its List of Documents and Supplementary List of Documents, ACOA has only supplied documents from April, 1998 forward, which strongly favours their claims. None of the materials from the period from January 1997 to April, 1998 are provided. These documents would elucidate the period during which the American investors state that ACOA negotiated in bad faith, treated them unequally, and made negligent misrepresentations to them. According to the court rules, ACOA must disclose not only documents that are in its possession, but also documents that ever were in its possession.
 
The attorney for ACOA, it his brief for the June 5, 2008, promised the Court that an affidavit from ACOA would be shortly forthcoming explaining the document situation. No such affidavit has ever been filed.
 
On June 5, 2008, a Supreme Court judge ordered ACOA to make full disclosure of everything with a semblance of relevance to the litigation by July 31, 2008 (see here). ACOA ignored this order and deadline, and instead has tried to argue and convince both the Defendants and the judge that no such order existed.
 
On November 21, 2008, the attorney for ACOA finally stated in an e-mail to the American Defendants that ACOA had destroyed all documents except those already provided. He promised that further details would be forthcoming shortly.
 
On January 12, 2009, the attorney divulged the following in an e-mail:
"I have been advised that your first file or application to ACOA (which I believe dates back to 1997) was scheduled for destruction on February 21, 2005, and authorized for destruction in May of 2005. The word "authorized" in this context means that it was actually destroyed in May of 2005. Another application was scheduled for destruction on December 1, 2005 and "authorized" for destruction on December 1, 2006. The first file ID number is 165641 and the GX number was 6029914-1, and the file ID number for the second matter was 165894 and the GX number was 6030430-1. There is no record of what was in these files such as a list or otherwise."
 
This means that ACOA, a Crown corporation, destroyed relevant documents not in anticipation of litigation, but consciously and deliberately after it had commenced a law suit.
 
Moreover, ACOA failed to disclose the destruction until after the June 5, 2008 hearing and the November, 2008 decision from the judge. The destruction of documents--potential evidence--would have been directly relevant to the judge's ability to determine if ACOA's delay in prosecuting the law suit had prejudiced the Defendants. If the delay had caused prejudice and the inability to have a fair trial, then the judge's decision to deny an application for dismissal might have been very different. It is more than curious that ACOA waited until after the judge filed his decision in order to admit the document destruction.
 
What Was Destroyed? Was it Relevant and Prejudicial?
The Defendants only know some of what was destroyed by ACOA, since the agency keeps its internal communications and dealings confidential. However, based on what was disclosed in the List of Documents and what the American investors themselves know they submitted to ACOA, a list can be started:
 
  • The report from an on-site audit of the business that verified its assets in September, 2000.
  • Analysis by ACOA official Valerie Murray on the $1.7 million tourism project proposed by the Defendants that might or might not justify its denial.
  • Notes and communications written by Director of Programs Stuart MacDonald, who died in 2004. Thus far, ACOA has not disclosed a single document authored by MacDonald, who had frequent contact with the Defendants starting in 1997, signed the agreement, participated in telephone calls and tele-conferences, and was last in contact with the Defendants as late as September, 2001. Specifically included would be a letter from MacDonald to the Defendants denying their tourism project application, but then asking for more information and details, i.e. keeping the Defendants engaged in the process.
  • The business plans submitted by the Defendants.
  • Communications between a provincial economic development offical, Gregory Morrissey and ACOA in 1998. ACOA disclosed documents and work product to Morrissey, who then went on to disparage the project and say it was unviable without having ever read the proposal. Morrissey also saw photographs obtained by ACOA that the agency represented as being the American Investor's cheese dairy facility in Louisiana. In fact, the pictures were of a hay shed.
  • Documents about the internal discussions about the national origin of the Defendants. Valerie Murray told the Defendants in a telephone conversation that the agency did not lend to Americans.
  • Report of the regional advisory committee meeting in January, 1998 where Valerie Murray told the Defendants their project proposal would be discussed.
  • Documents relevant to the long delays and lack of process experienced between October, 1997 and June, 1998. ACOA promised a turnaround time of 21 days for all project applications.
  • Documents related to why and how Valerie Murray and other ACOA officials could spread misinformation about the Defendants business plan to federal, provincial, and local government officials in the late winter and early spring of 1998.
 
 




























The British Columbia Law Institute in its Report on Spoliation asks when negligent evidence destruction has occurred:

When will it become reasonably foreseeable that the destruction of a document (for example) will cause harm to a litigant’s ability to prosecute a lawsuit? The answer to this question will require careful consideration of a specific set of facts presented to a court. However, some tentative observations may be made at this stage. Foreseeability will likely depend on how advanced the original cause of action is. There is a spectrum here. At one end would be cases where documents, records, or items of property are destroyed or altered at a time when no one is aware of an underlying cause of action. A duty of care should not exist in these circumstances. At the other end of the spectrum would be cases where a cause of action is suitably advanced to be in the contemplation of all the litigants. This would occur, for example, where proceedings have been commenced and served. There is an argument to be made that litigants (and perhaps others who are similarly aware of the proceedings) who commit spoliation of evidence in these circumstances should be able to foresee the likelihood of causing harm. In between the two ends of the spectrum would be a grey area, where a cause of action has “arisen” but proceedings have not been commenced and served.

Link

If ACOA truly believe in the validity of its claims against the Americans, and that the Americans' claims against it were not valid, why would it not have preserved all the possible evidence in its possession, especially since it initiated the law suit in 2002? Why destroy documents in 2005 and 2006?

Let the sunshine in