This Decision addressed two Applications between NE2 Canada Inc. and its founder Timothy Gunn (together, NE2), and several former employees (the Brokers).

The Brokers sought to strike their Security for Costs Application and Restricted Court Access Application from the Court record (the Strike Application). NE2 sought to clarify or vary a Court direction regarding the filing of Cross-Examination Transcripts (the Clarification/Variation Application).

The Strike Application involved two issues. First, the Brokers argued that the Restricted Court Access Application and its supporting Affidavit, which contained redacted evidence relevant to allegations of workplace toxicity at NE2, should be struck because the Affidavit contained scandalous information about their personal lives. However, Carruthers J. had denied the sealing request in a July 2024 decision, finding that the Brokers failed to demonstrate a serious risk to an important public interest under Sherman Estate v Donovan, 2021 SCC 25. She found that that the embarrassment and reputational harm did not meet the threshold for sealing, that redaction was an adequate alternative, and that the Affidavit’s relevance outweighed privacy concerns. The Court deemed the Brokers’ Restricted Court Access Application a repackaging of previously rejected arguments and emphasized the open court principle. The Brokers’ dissatisfaction with prior legal strategies or change in counsel did not overcome the presumption of court openness.

Second, the Brokers argued that their abandonment of the Security for Costs Application rendered the related materials irrelevant and unnecessary. Citing principles from Ariss v Ariss, 2011 ABQB 435, the Brokers argued that the materials were filed in error, were no longer relevant, and their withdrawal would not prejudice NE2 or harm the administration of justice. The Court rejected this argument, noting that abandoning the Application did not eliminate the relevance of the materials, particularly since they remained pertinent to NE2’s Defence and Counterclaims.

Regarding the Clarification/Variation Application, the Court analyzed Rule 6.7, which requires the filing of cross-examination transcripts unless otherwise directed. The Court clarified that no outstanding direction prevented the filing of transcripts from examinations conducted in March and April 2023 and directed NE2 to file them.

The Court also addressed the Gunn Affidavit, sworn in support of the Clarification/Variation Application. The Affidavit presented Mr. Gunn’s version of events on the Brokers’ departure, allegations of workplace toxicity, and related litigation history. The Brokers opposed its filing, alleging it served the improper purpose of damaging their reputations and sought restrictions on its use, citing the implied undertaking rule under Rule 5.33. The Court found the Affidavit relevant and material and allowed its filing with appropriate redactions. However, the Court cautioned that excessive dissemination to non-parties could breach the implied undertaking rule, risk defamation claims, and affect future costs awards.

Ultimately, the Court denied the Strike Application, allowing the Affidavits and cross-examination transcripts related to the Security for Costs Application and the Restricted Court Access Application to remain on the record with redactions. The Court granted the Clarification/Variation Application, confirming the requirement to file cross-examination transcripts under Rule 6.7 and allowing the Gunn Affidavit to be filed.