On May 7, 2014, Justice Soldevila of the Superior Court of Quebec ruled on a motion to determine whether the statutory prohibition on the disclosure of information pursuant to sections 2 and 3 of  the Supervisory Information (Insurance Companies) Regulations (the “Regulations”),2  made under  the Insurance Companies Act,3 prevented the production of certain documents filed with the Office of the Superintendent of Financial Institutions (OSFI). OSFI regulates and supervises all banks in Canada, and all federally incorporated or registered trust and loan companies, insurance companies, cooperative credit associations, fraternal benefit societies and private pension plans. OSFI is an independent, self-financing agency that reports to Parliament through the Minister of Finance.

The decision was rendered in the context of a certified class action brought against Manulife Financial by a shareholders’ rights organization calling itself Le Mouvement d’Éducation et de Défense des Actionnaires (MÉDAC)4. The lawsuit itself alleges that Manulife made negligent misrepresentations regarding its risk management practices and policies, and failed to disclose the extent of its exposure to equity markets at the time of the financial crisis.

Section 2 of the Regulations identifies certain types of information as “prescribed supervisory information” for the purposes of the Insurance Companies Act. Sections 3 to 5 of the Regulations provide that:

3. Subject to sections 4 and 5, a company shall not, directly or indirectly, disclose information referred to in section 2.

4. A company may disclose information referred to in section 2 to its affiliates or to its directors, officers, employees, auditors, securities underwriters or legal advisors, or to those of its affiliates, if the company ensures that the information remains confidential.

5. A company or any of its affiliates may disclose information referred to in paragraph 2(1)(c) if the company or affiliate considers the information to contain a material fact or material change that  is required by the securities laws of the relevant jurisdiction to be disclosed.

Manulife objected to producing the documents that were the subject of the motion, claiming that they were covered by the statutory prohibition on disclosure and/ or were otherwise privileged; and furthermore, that they were highly confidential and contained important commercial information. Significantly, the parties had reached an agreement to preserve the confidentiality of the documents sought by MÉDAC, and to limit the use to which MÉDAC could put the documents. The defendants had produced redacted versions of 63 documents (the “Redacted Documents”), with the parties agreeing that the appropriateness of the redactions would be determined by the Court.

In determining whether the Redacted Documents ought to be produced in full, Justice Soldevila considered an impact study published around the time that the Regulations were made, in order to better understand the legislator’s intent as to the reasons for the prohibition on disclosure. She noted that the study identified two exceptions to the prohibition on disclosure, as reflected in sections 4 and 5 of the Regulations: (i) disclosure to certain insiders (including employees, auditors, and legal counsel) who would be required to maintain confidentiality; and (ii) disclosure as required by applicable securities law.

The Judge found that many of the documents at issue were highly relevant to the common issues in the case, and also emphasized the general importance of production to all stages of the litigation process. She reiterated that documents that are confidential, but not privileged, may be subject to production in civil proceedings, citing two Ontario Superior Court decisions in this regard.5  In those cases, the Ontario Superior Court of Justice held that a statutory promise of confidentiality does not constitute an absolute bar to compelling production of documents and information in the possession and control of OSFI.

Justice Soldevila also considered the wording of analogous statutes on production of documents in the context of litigation. She found that in providing for confidentiality without expressly prohibiting disclosure in the context of litigation in the Regulations, Parliament must have intended for the ordinary principles of disclosure to apply, thereby rendering confidential documents producible.

Soldevila J. concluded that all of the redacted portions of the documents were protected by the Regulations. Nonetheless, where their contents were relevant to the litigation, the defendants were ordered to produce them. Where their relevance was doubtful, because they did not appear to relate directly to the issues in the litigation, production was not ordered.

Pursuant to this decision, relevance will be the central criterion for determining when otherwise confidential documents will be subject to disclosure in civil proceedings. The decision opens the door to more claims that redacted or confidential documents be produced, with relevance informing the scope of the disclosure.

1 The authors thank articling student Alice Melcov for her assistance in drafting this bulletin.

2 SOR / 2001-56.

3 SC 1991, c. 47.

4 The Movement for the Education and Defence of Shareholders

5 Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co, 1995 CanLII 7258 (ON SC); and Jeffery v. London Life Insurance Co, [2009] O.J. No 4343 (S.C.)


Markus F. Kremer 

Heather Pessione 


Banking Litigation and Arbitration
Securities Litigation
Litigation and Arbitration