Civil Litigation

Public release of records weakens future argument to seal

A company’s recent request to have the federal tax court permanently seal numerous pages of financial information is undermined by the fact that the material has already been widely reported in the media, Fredericton litigator Matthew Pearn tells CBC News.

As the article reports, lawyers have applied to the Tax Court of Canada to have documents that expose financial arrangements between Irving Oil and its partner Repsol at the Saint John's Canaport LNG declared confidential, even though the CBC says it obtained and reported on hundreds of pages of material about Canaport LNG last spring.

The documents show that Irving Oil has been collecting US$12.25 million a year in rent on the LNG properties from Repsol. This, says CBC, caused Saint John council to launch a review into whether tax breaks granted on those properties in 2005 were needed.

Lawyers for Repsol submitted documents about the development to the federal tax court in Alberta last year, during its battle with Ottawa over disallowed tax credits.

As Pearn, a lawyer with Foster & Company, tells CBC, Repsol's voluntary public disclosure of the material undermines any subsequent argument that it should be sealed.

"The horse is out of the barn already," he says.

"The general rule is an open court principle so documents that are filed into court are available and accessible. Knowing that, you would think before June of this year, Repsol would have tried to protect this information,” adds Pearn.

In June, the Tax Court of Canada issued a temporary order sealing the material, pending a full hearing on July 29. While CBC reports that the hearing was held, the court has not yet ruled on whether the material will be sealed permanently.

As the article notes, the sealing order has already prevented Saint John from obtaining a full court record of the LNG tax case to help in its review of the LNG property tax concession. Pearn explains that this can only hurt its ability to make a decision on the issue.

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